UN Rights of the Child Report

Baroness Massey of Darwen: asked Her Majesty's Government:
	How they will respond to the report of the United Nations Committee on the Rights of the Child in relation to United Kingdom procedures and practices.

Baroness Ashton of Upholland: My Lords, although we are under no formal obligation to respond to the report, the Government, together with the devolved administrations, are closely examining the report of the UN committee. We will consider its recommendations in developing an overarching strategy for children—a development that the UN committee welcomed.

Baroness Massey of Darwen: My Lords, I thank the Minister for that reply. This has been a good government for children, but there are areas of concern that are clearly expressed in the report. How will the consultation carried out by the Children and Young People's Unit feed into a strategy that will then reflect the concerns of the report?

Baroness Ashton of Upholland: My Lords, I agree with the noble Baroness that this has been a good government for children. The Children and Young People's Unit based in the Department for Education and Skills has undertaken wide public consultation. We are looking to build a 10-year strategy that will help to design and develop our policy-making so that we think about how we support our children across government over the next 10 years.

Baroness David: My Lords, will the national service framework for children, which is now being produced, contribute to the responses that the UN Committee on the Rights of the Child would like?

Baroness Ashton of Upholland: My Lords, the national service framework is the responsibility of the Department of Health. Within the framework that is being developed, issues to do with the broad welfare of children will be paramount across the preventive, acute and other strategies that it will encompass. That will obviously be an important part of the overarching work.

Baroness Blatch: My Lords, will the Minister acknowledge that there is still serious disquiet about the special educational needs toolkit, which affects a large number of children, particularly in the early years for assessment? What are the Government doing to respond to those who have that disquiet?

Baroness Ashton of Upholland: My Lords, as the noble Baroness is aware, we have developed the toolkit alongside organisations that have been able to work with us. It has been well received within schools. Some organisations have raised particular issues of concern and we are in dialogue with them. The toolkit is meant to be helpful and supportive for schools. It is not meant to be something that they have to follow exactly. The examples in it are pertinent to the different needs of children. Of course we shall continue that dialogue.

The Countess of Mar: My Lords, I declare an interest as a member of the Immigration Appeal Tribunal. Will the Minister ask her colleagues in the Home Office to look carefully at cases of unaccompanied minors coming into this country? I have seen a number of cases of children in their mid-teens—who are still minors—who are not accorded the observation and care that is expected of the Home Office when they come in.

Baroness Ashton of Upholland: My Lords, the Government are very concerned to ensure that minors arriving in this country are well looked after. They are protected under the 1951 UN convention on refugees, which the Government support. We are looking to ensure the protection of children who arrive here so that they are well cared for.

Baroness Walmsley: My Lords, how do the Government plan to respond to Recommendation 36 of the report, which asks them to respond with urgency and to,
	"adopt legislation throughout the state party to remove the 'reasonable chastisement' defence and prohibit all corporal punishment in the family and in any other contexts not covered by existing legislation"?
	Do the Government accept the results of a recent MORI poll that shows that the public are behind such a change to the law, as long as it does not criminalise caring parents, who might give the occasional light smack?

Baroness Ashton of Upholland: My Lords, the Government are absolutely opposed to violence and abuse against children. Noble Lords will be aware that the law allows only what is reasonable. We have recently conducted a web-based poll that showed that 82 per cent of people are in favour of that position. I acknowledge the work of the noble Baroness with the NSPCC as an ambassador. We want to ensure that parents recognise their responsibilities. Hence we have developed Quality Protects, Sure Start and the supporting organisations, such as Parentline and the National Family and Parenting Institute. We all recognise the need to make sure that our children are well cared for and to ensure that the Government play their part responsibly, but do not get involved in the normal course of family life. We are with the noble Baroness in opposing violence and the abuse of children.

Baroness Howe of Idlicote: My Lords, does the Minister agree that one way to ease the disquiet felt by a number of us would be to appoint a commissioner for children for England? Given that that is totally acceptable in other parts of the United Kingdom, why is it not yet acceptable here?

Baroness Ashton of Upholland: My Lords, in answer to other questions in your Lordships' House I have talked about the value that we place on our relations with the devolved administrations. We are talking and working with them and looking at the way in which their commissioners are evolving their roles and responsibilities. It is worth noting that of the 14 million children who live in our nations, 11.9 million live in this country. We have approached the issue by looking at a range of responses from different departments to ensure that we represent children's rights and responsibilities. We are considering the issue and keeping open our discussions with the devolved administrations.

The Earl of Listowel: My Lords, is the Minister aware of the report published last week by senior inspectors of services across the range for vulnerable children in education and probation in social services? The report found that children were being put at risk through lack of funding, lack of resources, lack of staff and inadequate co-ordination in multi-agency work. Does she recognise those concerns?

Baroness Ashton of Upholland: My Lords, the Government recognise the concerns expressed in the report; indeed, they are the reason why, at last week's conference, the Secretary of State for Health announced his proposals on children's care. Multi-agency working is something to which we all aspire. Across government, we recognise the need to ensure that children are protected and properly cared for. Multi-agency reports are clearly necessary to achieve the objective of ensuring that children are well looked after.

Baroness Carnegy of Lour: My Lords, I think that I heard the Minister say "in this country", meaning England. May I suggest to her that, when she is in the Westminster Parliament, she is in the United Kingdom?

Baroness Ashton of Upholland: My Lords, I think that I referred to "nations". However, I accept the noble Baroness's point.

Baroness Linklater of Butterstone: My Lords, can the Minister briefly tell us the Government's policy on the imprisonment of children? The United Kingdom has more children in prison than any other country in Europe. I am also not referring only to children of 15 or older, but am particularly concerned about those under 15.

Baroness Ashton of Upholland: My Lords, reform of the criminal justice system has been central to the Government's agenda, and reducing and preventing youth crime is a major part of that agenda. As noble Lords will be aware, prevention has a huge part to play in ensuring that children do not end up in the prison system. We have to keep children safe and secure by working with them when they are at risk of becoming involved in criminal activity and offending. There is a huge amount to be done in that respect. We also have to work very closely with children who are guilty of criminal activity. My noble friends and other colleagues will know that the Home Office is working very closely with others on a preventive system.

Houses in Multiple Occupation

Baroness Maddock: asked Her Majesty's Government:
	What plans they have to regulate houses of multiple occupation.

Lord Rooker: My Lords, some of the worst unregulated housing conditions exist in properties of multiple occupation in the private rented sector. It also accommodates some of the most vulnerable in our society. That is why the Government remain committed to introducing further legislation to license these properties, in order to improve the safety and the welfare of occupants.

Baroness Maddock: My Lords, does the Minister share my disappointment that the Government have not found time to put that commitment—made not only in the 1997 Labour Party manifesto but in the 2001 manifesto and the Government's housing Green Paper—into practice? The Minister has outlined the dreadful conditions in houses in multiple occupation and stated that such housing accommodates some of the poorest and most vulnerable in our society. Given the Government's commitments on health spending and eradicating fuel poverty, is it not extraordinary that they have not found time to include the issue in their legislative programme?

Lord Rooker: My Lords, although I accept the noble Baroness's comments about the 1997 manifesto, people tend to forget that we are still in the first parliamentary Session after the most recent general election. The department is working on this legislation—it is not on the back burner—because some 2 million people live in houses of multiple occupation and many are at risk. Generally speaking, HMOs are less safe than single-family households. We are actively pursuing legislation, which will be introduced as quickly as possible.

Baroness Trumpington: My Lords, will much of the housing in which students live therefore be regulated? It may be very difficult for students to find the money to pay for any eventual regulations.

Lord Rooker: My Lords, as we envisage that a five-year licence for a dwelling in multiple occupation will cost about £100, I will have no argument about licence fees forcing landlords to price students out of property. There is, however, an argument about the definition of property in multiple occupation. We therefore intend to license the properties at greatest risk—those of three storeys or more and accommodating five people or more. Although regulation would cover much student accommodation, such houses are very unsafe places to live. On average, every week in this country three people in dwellings of multiple occupation die because of fire.

Lord Marsh: My Lords, does the Minister agree that any further sale of local authority-owned or public housing can only exacerbate this situation?

Lord Rooker: My Lords, it is estimated that there are around half a million HMOs, and it is essentially a private sector problem because that sector is unregulated. There are multiple-occupied properties in the public sector, in local authorities and housing associations, but those sectors are regulated and action can be taken against them. Local authorities already have the ability to license such properties, but, unfortunately, most choose not to do so.

Lord Brooke of Alverthorpe: My Lords, like other noble Lords, I am glad to hear that the department is actively working on legislation; it is a great comfort to us. I wonder whether my noble friend—who will be driving forward this legislation with his usual vigour—can give us a slightly clearer idea of when it will appear. Will it be 2003, 2004 or 2005?

Lord Rooker: My Lords, it may appear more quickly than some people think, but I do not know the contents of the Queen's Speech. It is currently being decided whether the legislation should appear first as a draft Bill or a full Bill. As I said, however, we are actively working on it. We have already consulted on it, and there is no secret about the proposals. I accept that the matter requires urgency.

Baroness Hanham: My Lords, does the Minister recognise that houses in multiple occupation constitute a very valuable part of the rented market? Does he also recognise that the number of such properties is decreasing very substantially as they are sold off as private flats or houses? Does he think that a form of regulation is likely to stem or encourage this trend away from houses in multiple occupation?

Lord Rooker: My Lords, if regulation encourages a reduction in the number of unsafe dwellings, we should applaud it. The objective is not to remove such houses from the private rented market, but to make them safe places to live. Safety is at the root of the issue. I hope that landlords will not try to argue that, because we have to get the numbers up, we need to have more unsafe accommodation. I know that the noble Baroness, Lady Hanham, is not seeking to make that argument—which would be wholly unsatisfactory, particularly in view of the statistics I cited on the number of people killed. I accept that HMOs are a valuable part of the private-rented market, but I do not think that anyone can defend unsafe properties.

Lord Ezra: My Lords, does the noble Lord accept that many houses in multiple occupation are in a poor state of disrepair and that that applies particularly to energy? I refer to poor insulation and poor energy efficiency. Will that issue have particular attention paid to it in the forthcoming legislation?

Lord Rooker: My Lords, it will. I do not want to criticise all homes in multiple occupation but it is certainly the case that at least a fifth of them are not fit for human habitation under the present criteria. The safety of such properties and, of course, the capability of landlords properly to manage their properties will form part and parcel of the legislation.

NHS Managers: Performance Targets

Lord Clement-Jones: asked Her Majesty's Government:
	Whether senior public health service managers are being pressed to claim falsely that they are meeting targets, in the light of the recent BBC survey of 400 members of the Institute of Healthcare Management alleging such pressure.

Lord Hunt of Kings Heath: My Lords, NHS managers are not being pressed falsely to claim that they are meeting targets. NHS managers must act with integrity and the new managerial code of conduct will hold them to account for their professional behaviour.

Lord Clement-Jones: My Lords, the survey shows clearly that NHS managers are—and certainly feel—under considerable pressure to fiddle performance figures. Does not the new code just divert the blame from where it should lie; namely, on ministerial micro-management and the failure to give real managerial freedom to NHS staff?

Lord Hunt of Kings Heath: No, my Lords. The survey was highly selective. Two-thirds of those asked to respond did not do so. As regards micro-management, if I had followed the advice offered by the noble Lord, Lord Clement-Jones, over the past four years, as expressed in his countless Questions, debates and amendments moved to Bills, the NHS would indeed have been submerged by hundreds of targets.

Baroness Noakes: My Lords, does the Minister agree that the amount of fiddling of target figures in the NHS that is found out is just the tip of the iceberg? Does he therefore agree that the Government's NHS Plan targets are now not worth the paper they are written on?

Lord Hunt of Kings Heath: My Lords, I do not agree with that at all. I have made clear that we expect NHS managers to operate with integrity. I believe that the great majority of NHS managers do so. As regards the NHS Plan, I believe that the Government have made a great deal of progress. I refer to success in reducing waiting lists, making progress with regard to targets to build 100 new hospitals, speeding up access to GP clinics, increasing the number of training places for doctors and nurses, and increasing retention and recruitment among nurses. There is abundant evidence of real progress with the NHS Plan.

Baroness O'Neill of Bengarve: My Lords, has the Minister considered in the light of each performance target whether they create perverse incentives? Is there any process for doing away with those targets which have that effect—a process which I understand is now increasingly widely adopted in the private sector?

Lord Hunt of Kings Heath: My Lords, I understand that the noble Baroness wishes to see a culture in which there is trust between the Government, the Department of Health and people working in the NHS. I very much echo that sentiment. Indeed, I believe that the new managerial code of conduct will help that process. However, it is absolutely right that tough targets are set for the NHS. We are in the middle of turning the service round and delivering a first-class service to the public. We have to set targets to ensure that the NHS uses its extra resources as wisely as possible.

Iran: Human Rights

Lord Howell of Guildford: asked Her Majesty's Government:
	What action they propose to take in relation to the report from the National Council of Resistance of Iran which alleges serious breaches of human rights, such as public executions, stonings and gouging of eyes.

Baroness Symons of Vernham Dean: My Lords, we have serious concerns about human rights in Iran which we and our EU partners address through dialogue, UN resolutions and practical projects. We use a wide range of independent sources to assess the situation. But we do not rely on the often inaccurate reports of the National Council of Resistance of Iran, which undertakes fundraising and propaganda activities on behalf of the Mojahedin-e Khalq, a terrorist organisation proscribed in the United Kingdom.

Lord Howell of Guildford: My Lords, I am grateful to the noble Baroness for that reply. I recognise, as I am sure do many noble Lords, that there are practical reasons—so called "realpolitik"—for encouraging the positive elements in Iran and developing links with an important country as regards the Middle East crisis and the Gulf crisis. However, is the noble Baroness aware that there have been 292 public executions this year alone, endless instances of stoning to death, eye gouging, amputations and other horrific barbarities? Will she therefore ensure that no opportunity is lost in the future, whether through her visits or those of the Foreign Secretary or other Ministers, to tell Iran that those are intolerable practices which are completely incompatible with a serious and civilised role for Iran in global affairs?

Baroness Symons of Vernham Dean: My Lords, it is not just a question of realpolitik. The United Kingdom Government recognise the efforts of the Iranian Government and Parliament towards improving the human rights situation in Iran. We believe that those efforts have been genuine. However, as the noble Lord pointed out—and we also very much regret this—not least because of the political stand-off between the reformists and their conservative opponents, including, of course, the opponents in the judiciary, there has recently been a deterioration in the human rights situation. The figures that I have are deplorable. I refer to the number of people under sentence of death and those who have been subjected to public execution. However, they are not as dramatic as the figures which the noble Lord indicated. I should be happy to talk to the noble Lord about the figures that I have. It is important that we place some of the NCRI material in the right context. Some of it is exaggerated and is not borne out by reports from those on the ground.

Lord Wallace of Saltaire: My Lords, is critical engagement still the basis of the Government's approach to Iran? We are all conscious that there are many different elements within the current Iranian regime, some a great deal more reactionary than others, while others are trying to bring Iran into a much more open relationship with the rest of the world. Is critical engagement the way forward?

Baroness Symons of Vernham Dean: My Lords, we hope that the EU/Iran human rights dialogue will go ahead. There are no preconditions on either side. There may, indeed, be a United Nations resolution to follow. It is important to recognise that my right honourable friend the Foreign Secretary has on three occasions visited the country in the past year. On all occasions he raised human rights issues. The special rapporteur on violence against women of the UN Commission on Human Rights is due to visit Iran soon which we welcome. We also welcome the invitation by the Iranian Government to the EU and Australia to establish a dialogue on human rights. These are not solutions in themselves but they are indications of a willingness to engage on the issue.

Lord Corbett of Castle Vale: My Lords, I remind the House that I chair a committee on freedom in Iran. Has the Minister seen reports in the state-controlled press in Tehran that 20 public hangings and death sentences were passed in a recent three-day period? Although I welcome what the noble Baroness said about the Government's serious concern about the human rights situation in Iran, will she make clear what position the United Kingdom is taking today in discussions among EU foreign ministers about the tabling of a resolution for the UN General Assembly condemning the worsening abuse of human rights in that country?

Baroness Symons of Vernham Dean: My Lords, we have indeed noted a high number of death sentences in recent days. As my noble friend knows, we do not ever support the death penalty. However, I point out that the individuals concerned have almost without exception been found guilty of serious crimes such as murder or rape. I do not believe that we have evidence of quite the high number that my noble friend suggests. I have evidence before me of about 15 such sentences. I accept that they are deplorable but I do not have the same figure as my noble friend.
	My right honourable friend will engage with our colleagues in Europe as regards a UN resolution. The Foreign Secretary favours launching an Iran/EU human rights dialogue but at the moment there is some hesitation over sponsoring a resolution at this autumn's General Assembly.

Lord Russell-Johnston: My Lords, does the Minister agree that in her initial response to the noble Lord who tabled the Question she referred to the National Council of Resistance of Iran as a terrorist organisation and apparently produced as justification for that the fact that it is proscribed in this country? Does she agree that that proscription is contested?

Baroness Symons of Vernham Dean: My Lords, the noble Lord may possibly have misheard me. I said that the National Council of Resistance of Iran undertakes fundraising and propaganda activities on behalf of the Mojahedin-e Khalq—the MeK—and that the MeK is a terrorist organisation proscribed in the UK. We believe that it is proscribed for very good reasons: it publicly acknowledges its responsibility for terrorist actions against government buildings in Iran and carried out a series of mortar bomb attacks in central Tehran in 2000, which resulted in death and injury. It is not the NCRI but the MeK that is proscribed.

Business

Lord Grocott: My Lords, at a convenient time after 3.30 p.m., my noble friend Lady Symons of Vernham Dean will, with the leave of the House, repeat a Statement being made in the other place on Bali.
	While I am on my feet, I also say that although I am aware of the conventions governing formal tributes, many noble Lords will have heard the sad news of the death of a splendid Member of this House, Lady Serota. She gave tremendous service to this House for more than 30 years, not least when she chaired the Select Committee on the European Communities. I know that I speak for everyone here when I express my most sincere condolences to all her family.

Noble Lords: Hear, hear.

Enterprise Bill

Lord McIntosh of Haringey: My Lords, on behalf of my noble friend Lord Sainsbury of Turville, I beg to move that the Bill be now further considered on Report.
	Moved, That the Bill be now further considered on Report.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.
	Clause 204 [Reform of Community competition law]:

Lord McIntosh of Haringey: moved Amendments Nos. 168 and 169:
	Page 152, line 1, at beginning insert—
	"( ) confer power to make subordinate legislation;" Page 152, line 8, at end insert—
	"(8) Paragraph 1(1)(c) of Schedule 2 to the European Communities Act 1972 (c. 68) (restriction on powers to legislate) shall not apply to regulations which implement or give effect to a relevant Community instrument made after the passing of this Act."
	On Question, amendments agreed to.
	Clause 205 [Consumers]:

Lord Kingsland: moved Amendment No. 169A:
	Page 152, line 40, at end insert—
	"( ) A consumer is also a person (whether an individual or not) who receives or seeks to receive goods or services from another person who supplies the goods to services in the course of a business carried on by him and—
	(a) the goods or services are to be used in the course of the business of the person receiving or seeking to receive the goods, but
	(b) the goods or services will not be supplied to another person in the course of the business of the person receiving or seeking to receive the goods."

Lord Kingsland: My Lords, this is a late amendment, for which we apologise to the Minister. The issue was drawn to our attention by Trading Standards North West, which I believe is a group that represents trading standards officers. The purpose of the amendment is to give the same protection to small businesses that consumers will be given under the Bill. It would cover sole traders, partnerships and limited companies, all of which have been the target of traders seeking to make money by unattractive commercial tactics.
	While we recognise that it can be argued that limited companies should be able to look after their own affairs, the truth is that many of them are small businesses in which the directors are also the only employees and often members of the same family. Even when the company is large, rogues specifically target them hoping that inertia and bad communications will work to their advantage. I beg to move.

Lord Borrie: My Lords, I declare an interest because this amendment comes, as the noble Lord, Lord Kingsland, said, from a group of trading standards officers in the North West, Greater Manchester, parts of Lancashire and so on, and I am the vice-president of the Trading Standards Institute.
	When a business buys goods to resell, it is clear that the person buys them not as a consumer but as a business to sell on. It is therefore fair enough that the consumer protection provisions of the Bill that will be enforced by trading standards officers should not apply to such business-to-business situations. However, when a business buys goods not to resell but to use within the business, the business is behaving in many ways like an ordinary individual consumer. The theory may be—the noble Lord, Lord Kingsland, raised this when he discussed the reasons why a business should not normally be given consumer protection—that a business is always able to look after itself and its interests. In relation to goods that it does not buy to sell, it may be no more knowledgeable and no more expert about goods or services in order to protect itself than an individual.
	In a letter to me, Trading Standards North West cited the case of a printer supplying headed writing paper to an ordinary individual consumer. In that example, the work was poorly done, frequently badly done and full of mistakes. That is covered by the Bill as a practice that trading standards officers could "go for". However, if the printer switched to supplying businesses, he would be outside the sanctions of the Bill. I shall not bore noble Lords with other examples cited by the group; they are examples of businesses supplying to other businesses goods and services that are not fit for the purpose or shoddy.
	If the amendment is agreed to—noble Lords will understand that I feel that there is much merit in it—it would not be wholly without precedent. The Unfair Contract Terms Act applies when, for example, a firm buys cars for its staff—I refer to a firm that is not itself in the business of cars and does not know any more about cars than anyone else. Why not make the enforcement powers in the Bill available when businesses buy goods or services other than for resale? There is much merit in the amendment.

Lord McIntosh of Haringey: My Lords, I am glad to have had an opportunity to read the submission from the Trading Standards North West group, which represents not just small and medium-sized local authorities but all of the local authorities in Merseyside and Greater Manchester. It is a significant and serious group and we must take its arguments seriously.
	The focus of the Bill is to strengthen the enforcement of consumer protection legislation. If we allowed enforcement orders to be made to stop unlawful conduct that harms the collective interests of businesses when they are purchasing goods and services for their own use, that would be a significant extension of the scope of this part of the Bill. That is true whether or not one adopts the presumed restriction to the amendment suggested by my noble friend Lord Borrie; that is, to goods that businesses buy for their own use rather than for onward sale, although the amendment does not say that.
	The fundamental rationale for consumer protection legislation is that consumers are in a weak bargaining position when they deal with businesses. Consumers can be expected to have less knowledge of their legal rights and of how to enforce them than the business with which they are dealing. Consumer protection legislation, including the provisions in this part of the Bill—it is concerned with the effective enforcement of that legislation—seeks to address that imbalance. I do not deny the cases that the trading standards group raised and I recognise the point cited by my noble friend Lord Borrie about stationery that was poorly done or full of mistakes. However, the Supply of Goods and Services Act 1982 requires traders who contract to provide a service, whether to individual consumers or to businesses, to do so with reasonable care and skill. Any supply of goods—for example, printed stationery—must be of satisfactory quality and fit for the purpose. Failure to observe those requirements would constitute a breach of contract, and the purchaser could reject the goods and refuse to pay for them.
	Of course, there is a grey area between small businesses, which often buy goods in areas in which they do not have expertise, and consumers. But, when a person goes into business, he is supposed to do so knowing that he will have to negotiate, bargain and form relationships with other businesses. As we recognise that small businesses have particular difficulties, we have resources available to help them. I refer, in particular, to the DTI's Small Business Service and Business Links.
	When we were producing the consumer White Paper of 1999, we consulted on the idea of extending some consumer protection measures to small businesses. We recognised that small businesses can find themselves in disadvantageous negotiating positions similar to those faced by individual consumers. But we did not find widespread support for that proposal. Since then, we have not come under pressure from business groups—for example, the national association of trading standards officers—for the Bill to be amended to allow for enforcement orders to be made against businesses which act unlawfully. As I said, the trading standards community has not been pressing for it.
	It would be quite wrong to amend the Bill in such a significant way at this late stage without having consulted stakeholders—particularly business and small business representatives—to discover whether there is any appetite for it. Careful consideration would be needed of precisely which businesses should be covered—that is, small businesses only or goods bought for the businesses' own use. The amendment would apply to all businesses, regardless of their size, when they are purchasing goods or services for their own use. That may well not be appropriate.
	We need to ensure that widening the scope of Part 8 in this way would not result in trading standards officers devoting less effort to mainstream consumer protection, which is their primary function, and we would need to consider whether organisations which represent the collective interests of business should be designated as enforcers under Clause 208. These are very different questions from those which concern designating consumer organisations as enforcers because trade bodies are almost invariably funded by their member companies.
	As I indicated when responding to the question about stationery, we are not leaving businesses without protection. Some of the legislation and common law obligations that we intend to specify in the orders already apply to businesses as well as to consumers; for example, in the Sale of Goods Act, the Supply of Goods and Services Act, the Trade Descriptions Act and the Control of Misleading Advertising Regulations.
	Important protection for businesses also exists in company law. Under the Insolvency Act 1986, the Secretary of State can ask the court to wind up a company where she judges that to be in the public interest on the basis of investigations undertaken under the Companies Acts. That power is exercised to remove from the market place companies whose misconduct offers a threat to others, including other businesses. The DTI is reviewing the operation of company law powers and, in that context, is considering the protection for responsible enterprises available under company law. I can assure the House that the DTI has taken note of the concerns raised in the amendment, which I hope will not be pressed.

Lord Kingsland: My Lords, I am most grateful to the Minister for dealing with the amendment so thoroughly at such short notice. I also thank the noble Lord, Lord Borrie, very much for his support.
	In responding, the Minister said two things. First, he said that, frankly, the amendment was too late. The Bill has been devised and to make such a radical change to Part 8 at this stage would mean that there would be consequential implications for other parts of the Bill which would be too complicated to introduce.
	However, at the same time, the noble Lord also said that, to the extent that the Government had consulted on the matter, they were confident that the problem was not as widespread as the Trading Standards North West group believes it to be. That, I understood, was what the Minister said but I believe that he is about to correct me.

Lord McIntosh of Haringey: My Lords, I did not go quite that far. I said that no one else had drawn it to our attention. I did not express any confidence or otherwise in the degree of mis-selling to businesses. Rather, I argued that there are other remedies.

Lord Kingsland: My Lords, I am most grateful to the noble Lord for that response because it leads me to ask him whether, if such further evidence were to become available, the Government would give urgent consideration to the matter. It is clear that this problem worries trading standards officers in the North West. If it transpires that there are equally strong feelings among trading standards officers from other parts of the country, will this be a matter to which the Government, at an early stage, will give careful attention?
	As I understand it, the theory behind consumer protection is the imbalance in the market between powerful commercial interests supplying, on the one hand, and the individual consumer purchasing, on the other. But there is not that great a distinction between powerful commercial interests, on the one hand, and, on the other, commercial interests which are more or less in the same position as individual consumers. I refer to the sole trader or the very small company—the type of company that obviously concerns trading standards officers.
	Therefore, if the core of this issue concerns commercial power—differential commercial power in the market—that suggests that, if the evidence that the Minister's investigations establishes supports the case set out in the Trading Standards North West group's own paper, then the Government should give consideration to early legislation.

Lord McIntosh of Haringey: My Lords, with the leave of the House, I have been asked a direct question. My argument was that we had already carried out the consultation—in other words, we consulted organisations representing business and, of course, the national association of trading standards officers. They did not express that view, and I believe it unlikely that they will express that view before we come to consider the matter at Third Reading.
	However, I am certainly glad to say to the noble Lord, Lord Kingsland, that we always keep these matters under review and we always take representations of this kind very seriously. If a body of opinion and evidence builds up, of course we shall seek to respond to it.

Lord Kingsland: My Lords, again, I am most grateful to the Minister for his reply. I am sure that the trading standards officers, not only in the North West but in other parts of the country, will have their attention drawn to this exchange. I believe we can say that it is now for them to raise this issue with the Government if they feel that it is as widespread as some suggest. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 208 [Enforcers]:

Lord Graham of Edmonton: moved Amendment No. 170:
	Page 155, line 2, after "be)" insert "is not itself a trading body and"

Lord Graham of Edmonton: My Lords, in moving Amendment No. 170, I shall speak also to Amendments Nos. 171 to 173. These amendments deal with the enforcement order aspects of the Bill. They are intended to be helpful to us and to the Minister by clarifying a number of matters.
	As a preamble, the Bill introduces enforcement orders. They are basically "stop now" orders extended to UK consumer protection legislation. Although there will be one regime, they will also replace "stop now" orders in relation to EU legislation. The Explanatory Notes to the Bill claim that these are similar to injunctions.
	Although there will be one regime, there will be differences within the regime for domestic and EU legislation. In the case of domestic legislation a consumer will be an individual who receives, or seeks to receive, goods or services other than in the course of his business or, with a view to setting up a business, from a person who supplies them in the course of business. This inclusion of prospective business people is intended to cover individuals who participate in "homeworking" schemes. For Community infringements, consumers must include all people who are consumers for the purposes of the nominated directives. I understand that the department will list the laws to which each of those apply.
	The Secretary of State will have the power to make an order conferring enforcement powers on other UK public bodies and private consumer organisations that have as one of their purposes the protection of the collective interests of consumers. Such a private organisation will need to meet specific criteria set down by the Secretary of State by order. Different criteria may be set for Community and domestic purposes.
	From experience on this Bill and others, I am well aware that it is possible that the words in the amendment, the case that I make, and the impact of that on the Bill may not be as one. It may help the Minister if I raise one or two points for clarification. I have previously declared a marginal interest in that I still have contacts with the Co-operative movement and with the British Retail Consortium with whom I have consulted on these matters. There is a need for clarity as to the character of the orders; a need for legislative confirmation of damages and costs for a business where appropriate; a need for guidance to be issued prior to action being undertaken; a need for co-ordination; and a need to avoid the use of the orders to clarify the law rather than to prevent an action that is clearly beyond the law.
	Reputable retailers, both large and small, believe that their reputation and profitability rely on serving their customers to the best of their ability. As such they strongly support measures to root out rogue traders who rip off consumers and undermine consumer confidence. The new enforcement orders introduced in the Bill to replace and to supplement the "stop now" orders introduced earlier in the year should have that as their primary purpose. However, the Bill gives us an opportunity to put behind us the disappointing experience of the "stop now" orders which were introduced hastily without proper consultation and which the OFT used to clarify the law in ways that had not been foreseen and without the necessary guidance having been produced. That guidance has still not been forthcoming. The guidance is essential to allow retailers to understand what is required of them. I hope that the Government will consider not bringing this part of the Bill into force until such guidance has been produced by the OFT. The main thrust of the provisions should be directed against rogue traders.
	I am sure that the Minister will understand the tentative way in which I have put the case. In seeking to clarify the respective powers and responsibilities concerning businesses and consumers, I am well aware that there is a great deal of misunderstanding. In my view, the Minister can help the British Retail Consortium and the many bodies that it represents to understand better the thrust of the legislation. I beg to move.

Lord McIntosh of Haringey: My Lords, I am grateful to my noble friend Lord Graham for his strong support for the orders and I am grateful for the way in which he introduced his amendments. I shall speak about them first and then turn to the guidance and the consultation.
	Amendment No. 170 seeks to ensure that consumer organisations that carry on a commercial activity are not eligible to be designated as enforcers under this part. Amendment No. 171 is an alternative to Amendment No. 170 which would allow the Secretary of State to designate a consumer organisation with a trading arm as an enforcer but only in respect of those areas where the organisation does not have a trading interest.
	We believe that the fact that a consumer body has a trading arm should not of itself disqualify it from being designated as an enforcer, provided that the trading arm does not control the body and that any profits made by the trading arm are used only for the purposes of furthering the stated objectives of the body. Excluding bodies with trading arms would exclude many, if not most, charities that use commercial activities to fund their stated objectives.
	I understand the point about the potential conflict of interest, which is why the draft criteria I have made available to the House and on which we shall consult fully after Royal Assent includes the strict requirement that before the Secretary of State can designate a private consumer organisation as an enforcer, she must be satisfied that the organisation is so constituted, managed and controlled as to be expected to act independently, impartially and with complete integrity. If, after being designated, a consumer organisation uses its powers to further its own commercial interests it would be breaching that criterion and the Secretary of State would remove its designation.
	We shall consult widely on the draft criteria giving all interested parties the chance to raise their concerns. The consultation will also include draft guidance, to which my noble friend referred, on the applications and designation process, including pragmatic proposals on dealing with potential conflicts of interest where an applicant has a commercial trading arm, and on removing a body's designation if it ceases to meet the criteria. I welcome comments on the consultation on the draft criteria.
	Amendment No. 172 seeks to substitute the existing power for the Secretary of State to make orders under this clause subject to negative resolution procedure with one subject to affirmative resolution procedure. I appreciate that the power will be used to make statutory instruments setting out the criteria that private consumer organisations will have to meet to be given enforcement powers, but I point out that the Delegated Powers and Regulatory Reform Committee has examined all the proposed delegated powers in the Bill and is content for the power in this clause to be subject to the negative resolution procedure.
	Amendment No. 173 seeks to ensure that this part could not be used solely for the purpose of clarifying legislation where the intention of that legislation is in doubt. It is for the OFT or another enforcer to decide whether it is appropriate to initiate the enforcement procedure provided for in any given circumstance. I recognise that there may be some situations where the enforcer and the trader disagree as to whether a breach has taken place because they have different views as to what the legislation means. However, Clause 209 generally requires enforcers first to consult the OFT (if it is not the enforcer) and the person against whom the enforcement order may be made and give the latter the opportunity to stop the infringement without the need for court action. I would expect that discussion period to be used to try to resolve any different views.
	I accept that there may be some cases where a genuine difference of view remains, but in those cases only the courts could resolve such a difference. The courts can find that there is an infringement only if the collective interest of consumers is being harmed. I understand the concerns, but I hope that I have reassured my noble friend Lord Graham that those points are already being dealt with.

Lord Graham of Edmonton: My Lords, I am grateful to the Minister and his colleagues who have taken seriously the points I wanted to raise. We are talking about the consumer population of this country who could be affected by the manner in which the interpretations take place. The Minister has satisfied me that all my points have been considered in one way or another by himself and his colleagues. I do not believe that I shall return to the matter again. I am grateful to the Minister for his action. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 171 and 172 not moved.]
	Clause 210 [Applications]:
	[Amendment No. 173 not moved.]

Lord Peyton of Yeovil: moved Amendment No. 174:
	Page 157, line 4, leave out subsection (8).

Lord Peyton of Yeovil: My Lords, we are all grateful for the Minister's guidance. He is extremely skilled in dealing with these matters—even when it comes to battling with things that apparently do not mean very much. It would be interesting to know more about the injunctions directive. I am not as intimate with every line of the Bill as the Minister, so he is in a much better position to guide us. Perhaps he could say who or what is the injunctions directive to which Clause 210(8) refers:
	"The purpose of a Community enforcer must be construed by reference to the injunctions Directive"
	I do not have a clue what any of that means. I may be simple, but I consulted my noble friend on the Front Bench and he was unable to enlighten me. Perhaps we may both be enlightened by the Minister.
	As to Amendments Nos. 178 and 179, Clause 217 seems cast very wide to catch people, including an associate of an individual—he can hardly help being that—who can be
	"the spouse of a relative of the individual's spouse".
	The Minister has never been able to conceal the fact that he has a sense of humour. I am sure that he has a lively sense of the ridiculous. I wonder whether the noble Lord does not find that provision somewhat ridiculous. I will not make a long speech because I do not know what that subsection means. If the Minister would be good enough to provide guidance on those two matters, I would be extremely grateful. Then I might be in a position to make a slightly more sensible reply than has been possible with my opening speech. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I support my noble friend in Amendments Nos. 178 and 179. As I understand Clause 217(10)(e),
	"the spouse of a relative of the individual's spouse"
	could be the wife or husband of a relative of my wife—which is a wide net to cast. When read in conjunction with subsection (13), where the definition of a relative is also extremely wide, it seems that the Bill has created a huge pool of people—many of whom will not be aware that they are or could be associates.
	The key to this is whether an associate could reasonably be expected to know that he or she was an associate. The clauses are drawn so wide as to mean that all sorts of people will, quite unwittingly, find themselves dragged into the net. In the case of a second or third-generation family firm, together the family might control one-third of the voting power and therefore fall within the provisions of the clause but, after three generations, family members might have spread all over the country or the world. I have acted for long-standing family businesses where the relatives have dispersed as far as New Zealand and the United States. For them to be considered associates and therefore caught by Clause 217 seems a catch-all too far.

Lord McIntosh of Haringey: My Lords, I will do my best to enlighten the noble Lord, Lord Peyton, and to persuade him that the Bill is not entirely trivial or pointless.
	Amendment No. 174 seeks to remove the requirement that where a court may examine whether the purpose of a Community enforcer justifies its making the application, the purpose of the Community enforcer must be construed by reference to the injunctions directive. That is set out on page 80, paragraph 452, of the Explanatory Notes:
	"Directive 98/27/EC of the European Parliament and of the Council of 19 May 1998 on injunctions for the protection of consumers' interests (known as the 'Injunctions Directive') . . . permits consumer protection bodies"—
	which are called "qualified entities" in the directive—
	"designated by the Member States"—
	so it is up to them to say who they should be—
	"to apply to the courts or competent administrative authorities for orders to require traders to cease conduct that constitutes a breach of any of the consumer protection directives listed in the annex to the Injunctions Directive and that harm the collective interests of consumers. Qualified entities can bring proceedings in their own Member State and in another Member State if an infringement there has effects on consumers in the qualified entity's home State".
	That really means that if rogue traders operate in one member state against consumers in another, those traders cannot escape. That is why there must be European rather than national legislation. I hope that the noble Lord agrees that seeking injunctions to stop traders acting in a roguish way is a well-established principle and form of consumer protection. The injunction directive ensures that rogue traders cannot get away with it by targeting consumers in a different country.
	I do not know whether the noble Lord, Lord Peyton, is interested in pursuing Amendment No. 174. Perhaps he is more concerned about the meaning of the injunction directive. I hope that I am not misjudging him. The directive only gives Community enforcers the right to make applications for enforcement orders in respect of those interests protected by the enforcer in its home state. Removing subsection (8) could inhibit a court from refusing an application from a Community enforcer that was taking action in respect of infringements that it could not act to prevent in its home state. It is a case of, "Do as I do, not as I say".
	Clause 215(3) gives enforcers the discretion, where a person has failed to comply with an undertaking given to the court, to apply for an enforcement order or interim enforcement order instead of an order finding that the infringer is in contempt of court. Subsection (5), which Amendment No. 176 would remove, disapplies certain procedures of the original enforcement process that are inappropriate. I will explain why the provisions in subsection (5) are right.
	First, although we would certainly expect the enforcer to approach the infringer before bringing further court proceedings, we do not see a need for the enforcer to consult the Office of Fair Trading under Clause 209 and delay bringing action for 14 days, for enforcement orders, or seven days, for interim enforcement orders, where successful court action has already been taken but the infringer has then breached an undertaking that he has given to the court.
	Secondly, the power for the OFT to make directions as to which enforcer may make an application for an enforcement order is unnecessary in these cases because Clause 215(2) means that only the enforcer who made the original application or the OFT can make an application to the court to enforce the order or undertaking.
	Thirdly, we think it only right that the court which heard the original application, and which therefore knows and understands the background to the case, should hear the further application.
	Finally, we see no reason why the court should be able to accept a further undertaking from a person who had already breached an undertaking that he had given. What we are doing here, I hope it will be agreed, is simplifying the procedures; we are removing unnecessary steps but maintaining the necessary protection.
	I turn to Amendments Nos. 178 and 179, to which the noble Lord, Lord Hodgson, spoke. The definition of an "associate" is relevant for the purpose of determining whether an application for an enforcement order can be made against a person who consents to, or connives at, conduct by a body corporate that constitutes an infringement.
	Amendments No. 178 and 179 seek to remove two elements from the definition of "associate" in subsection (10), namely, paragraphs (e) and (g). I understand concerns that paragraphs (e) and (g) might be seen as defining the word "associate" too widely. But we do not want a person to be able to avoid enforcement action being taken against him simply by placing shares nominally in the name of a member of his extended family—for example, his wife's sister's husband. They could be living in the same house or be close friends. Paragraph (e) is intended to prevent that.
	Paragraph (f) covers unmarried couples, including same sex couples who live together in an established relationship. In exactly the same way as paragraph (c) includes within the definition of an "associate" a person who is a relative of the individual's spouse, paragraph (g) covers relatives of a person's established partner. We see no good reason to make a distinction between relatives of an individual's spouse and relatives of an individual's partner. I hope that that deals with the points raised.

Lord Peyton of Yeovil: My Lords, I am grateful to the noble Lord. I remind him of my purpose, which was slightly clearer than the clause. Nevertheless, I am grateful to him for reading out that illuminating passage from the Explanatory Notes. It would not be the first time that an explanation has resulted in greater length and more obscurity. That is in no way his fault. To ask the noble Lord to exert his talents in improving on these things without much notice would, I realise, be asking far too much and be more unreasonable than even I could ever dream of being.
	It was never my intention to spoil the clause or to lacerate it in some way by leaving out such gems of language as these two amendments cover. What I had hoped to do was to penetrate slightly its opaqueness. I realise that that was taking on rather a big task and was asking the noble Lord to do really more than he had the time to do today, despite his immense talents. In the circumstances, there would be no point in going back to this rather wearing subject. I merely take the opportunity to appeal to the noble Lord's good nature and wisdom, and to ask whether he could exert these great qualities, which we know he has, to leave out, wherever possible, such awful language, instead of marring that wastepaper basket which is familiarly known as the statute book with more garbage than it already has. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 213 [Interim enforcement order]:

Lord McIntosh of Haringey: moved Amendment No. 175:
	Page 159, line 19, at end insert—
	"(5A) An application for an interim enforcement order must refer to all matters—
	(a) which are known to the applicant, and
	(b) which are material to the question whether or not the application is granted."

Lord McIntosh of Haringey: My Lords, in moving Amendment No. 175, I shall speak also to Amendments Nos. 180, 181 and 182. Amendment No. 175 responds to the opinion of the Joint Committee on Human Rights that it would be beneficial to draw attention on the face of the Bill to the need for the courts to take account of the whole picture when considering an application for an interim enforcement order under Part 8 and not to simply accept the applicant's ipse dixit. I thought we did not do that any more—I am shocked—but it comes from the Joint Committee on Human rights and not from the Government.
	Clause 224 requires the OFT to publish advice and information to explain the provisions of Part 8 and to indicate how it expects them to operate. It would be inappropriate to legislate to tell the court to look at the evidence before it in deciding whether to make an interim enforcement order. However, when an application is made without notice being given to the person named in the application, the whole picture is necessarily limited to the evidence put before it by the applicant.
	It is our view that on an application without notice the applicant will be obliged to put before the court all material facts and the court will consider them in deciding whether to make an interim enforcement order. The Joint Committee agrees that this is likely to be the case. But, for clarity, Amendment No. 175 includes the obligation on the face of the Bill.
	The amendment, which applies to applications made both with and without notice, matches a similar provision in practice direction 25 in England and Wales on interim injunctions. The obligation to disclose all matters which are known to the applicant and which are material to whether or not the application is granted will enable the court to consider the whole picture. This will be true both when an application is made without notice and when an application with notice is not contested by the defendant. Where an application with notice is contested, the defendant will be able to put before the court any additional considerations against making the order sought and which may not be known to the applicant.
	Amendments Nos. 180 and 181 are in response to an amendment tabled in Committee which the Government agreed to consider. The amendment recognises that the existing wording of Clause 224(5), which states:
	"If the OFT is preparing advice or information",
	is inappropriate, given that this section requires the OFT to produce such guidance.
	I turn to Amendment No. 182. Clause 227(4) and (5) set out the circumstances in which the supply of goods or services wholly or partly outside the United Kingdom are to be regarded as being supplied to a consumer in the UK so that the provisions on domestic infringements will apply to those transactions. The existing definition of the arrangements for supply which had to be satisfied mirrored those currently in Section 138(3) of the Fair Trading Act 1973. That Act uses rather old-fashioned language about documents and correspondence which are too restrictive in today's world of Internet transactions and other forms of electronic communication. Amendment No. 182 updates those provisions to include arrangements made by electronic means. I beg to move.

On Question, amendment agreed to.
	Clause 215 [Further proceedings]:
	[Amendment No. 176 not moved.]
	Clause 217 [Bodies corporate: accessories]:
	[Amendments Nos. 178 and 179 not moved.]
	Clause 224 [Advice and information]:

Lord McIntosh of Haringey: moved Amendments Nos. 180 and 181:
	Page 165, line 39, leave out "If the OFT is" and insert "In"
	Page 165, line 39, leave out "it" and insert "the OFT"

Lord McIntosh of Haringey: My Lords, I beg to move formally.

On Question, amendments agreed to.
	Clause 227 [Goods and services]:

Lord McIntosh of Haringey: moved Amendment No. 182:
	Page 167, line 16, leave out from "made" to end of line 20 and insert "by any means and—
	(a) at the time the arrangements are made the person seeking the supply is in the United Kingdom, or
	(b) at the time the goods or services are supplied (or ought to be supplied in accordance with the arrangements) the person responsible under the arrangements for effecting the supply is in or has a place of business in the United Kingdom."
	On Question, amendment agreed to.
	Clause 233 [Information]:

Lord McIntosh of Haringey: moved Amendment No. 183:
	Page 169, line 19, at end insert—
	"( ) In subsection (1) the reference to an enactment includes a reference to an enactment contained in—
	(a) an Act of the Scottish Parliament;
	(b) Northern Ireland legislation;
	(c) subordinate legislation."

Lord McIntosh of Haringey: My Lords, in moving Amendment No. 183, I shall speak also to Amendments Nos. 184, 186 and 187, which are government amendments. I shall also refer to Amendments Nos. 185 and 188 standing in the name of the noble Lord, Lord Kingsland.
	Amendments Nos. 183 and 184 are minor technical amendments. They ensure that the definition of "enactment" in Clause 233 can include Scottish and Northern Ireland legislation, and subordinate legislation. This is to ensure that Scottish and Northern Ireland legislation can be added to Schedule 14 by order after Royal Assent, and so brought within Part 9.
	Amendments Nos. 186 and 187 bring the disclosure gateway for criminal proceedings in Part 9 into line with the equivalent gateway in the Anti-terrorism, Crime and Security Act 2001. Amendment No. 186 amends the gateway to allow disclosure to any person for the purpose of criminal proceedings. We propose that change after listening to concerns expressed by the Local Authorities Coordinators of Regulatory Services and the Alliance Against Counterfeiting and Piracy that Part 9 as drafted would prevent trading standards officers from disclosing information to consumers and private bodies to assist them in bringing private prosecutions.
	We are aware of a number of successful cases in which industry bodies, in particular, have used such information to assist with private prosecutions for copyright theft. We do not want to prevent such cases being taken in future and see no reason why the gateway for criminal proceedings in the Bill should be narrower than that in the Anti-terrorism, Crime and Security Act 2001.
	We are accompanying that widening of the gateway for criminal proceedings with an additional safeguard that must be taken into consideration by a public authority before information is disclosed under that gateway. Amendment No. 187 adds a requirement that, before disclosing information for the purposes of UK criminal proceedings, the disclosing authority must have satisfied itself that the disclosure is proportionate to what is sought to be achieved by it. That responds to an amendment tabled in Committee which my noble friend Lord Sainsbury agreed to consider. It also brings Clause 237 into line with the Anti-terrorism, Crime and Security Act 2001.
	Amendment No. 188, tabled by the noble Lord, Lord Kingsland, is virtually identical to the amendment that my noble friend Lord Sainsbury agreed partially to consider in Committee. I hope that our version is satisfactory.
	Finally, No. Amendment 185, tabled by the noble Lord, Lord Kingsland, and others, would prevent an investigator or prosecutor from using any information obtained under Part 6 of the Bill for the purpose of subsequent proceedings under the Competition Act 1998 unless that information could have been obtained by the Office of Fair Trading or the Serious Fraud Office in any event using their existing powers. All of the powers contained in Part 6 are modelled on existing powers contained in Part II of the Criminal Justice Act 1987, but for one exception that I shall describe. So those powers are not novel and are regularly applied during criminal investigations. Furthermore, the powers are also available to the OFT under existing provisions of the Competition Act 1998.
	The exception is the intrusive surveillance powers under the Regulation of Investigatory Powers Act 2000, which are not provided for in earlier legislation but which are appropriate and necessary for the investigation of cartels. It is accepted and common practice by law enforcement agencies that if, during a properly conducted investigation, evidence is uncovered that points to a different civil or criminal offence having being committed, that evidence can be used in a court of law.
	The decisive point is that evidence must be obtained using proper powers and observing all existing safeguards. Information gathered under the Part 6 powers will have been obtained to the highest standard. In particular, any investigation using powers under the Regulation of Investigatory Powers Act 2000 is subject to high safeguards. That Act was passed by both Houses to ensure that any type of surveillance powers are exercised in such a manner as to ensure the safeguarding of the human rights of those under investigation.
	The Joint Committee on Human Rights expressed itself as content with Part 6 of the Bill. In its 18th report, it stated:
	"In our view the rights of suspects, including the privilege against self-incrimination, are adequately protected".
	If we were to accept the amendment, we should put in question any evidence currently obtained under the Criminal Justice Act 1987 subsequently used in civil proceedings.
	For all those reasons, evidence obtained through an investigation under Part 6 should be admisssible for the purpose of civil proceedings under the Competition Act 1998. I hope that in anticipating the speech to be made by the noble Lord, Lord Kingsland, or his colleagues, I have accurately expressed the intention behind Amendments Nos. 185 and 188. I beg to move.

Lord Tordoff: My Lords, in calling this group of amendments, perhaps this is the appropriate time to say that, were Amendment No. 187 agreed to, I should not be able to call Amendment No. 188.

Lord Kingsland: My Lords, I thank the Minister for his response. On Amendment No. 188, the noble Lord, Lord Sainsbury, was kind enough to say during Committee that he would go away to reflect on our draft. He has done that; the Minister has returned with his preferred version. Although it does not meet everything that we would have wanted, in my view it is sufficiently comprehensive for us to allow our amendment to fall by the wayside.
	On Amendment No. 185, the noble Lord, Lord Sainsbury, gave us no ground for hope in Committee and that approach has been largely mimicked by the noble Lord, Lord McIntosh. The matter was dealt with in Committee on 29th July 2001 at col. CWH 739 of Hansard. Our concern was that powers that could quite properly be used under Part 6 of the Bill in respect of the new cartel offence—powers that were the equivalent of powers in Part II of the Criminal Justice Act 1987—could be used in relation to purely civil offences. I accept that many of those powers could also be used in purely civil offences under the terms of the Competition Act 1998.
	The Minister rightly pointed out the one exception to that are the intrusive surveillance powers, which, for obvious reasons, did not exist when the Competition Act was passed in 1998. The Minister is saying that those powers ought, in certain circumstances, to be available to the authorities for civil offences under that Act. I think that the use of those powers would be inappropriate and, for that reason, I shall reflect on whether to table the amendment again on Third Reading. Meanwhile, I shall not press it.

Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord for his response. I shall think carefully about what he said about Amendment No. 185.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendment No. 184:
	Page 169, line 20, at end insert—
	"( ) The power to make an order under subsection (4) includes power to add, vary or remove a reference to any provision of—
	(a) an Act of the Scottish Parliament;
	(b) Northern Ireland legislation."
	On Question, amendment agreed to.
	Clause 236 [Statutory functions]:
	[Amendment No. 185 not moved.]
	Clause 237 [Criminal proceedings]:

Lord McIntosh of Haringey: moved Amendments Nos. 186 and 187:
	Page 170, line 38, leave out from "to" to end of line 4 on page 171 and insert "any person—
	(a) in connection with the investigation of any criminal offence in any part of the United Kingdom;
	(b) for the purposes of any criminal proceedings there;
	(c) for the purpose of any decision whether to start or bring to an end such an investigation or proceedings." Page 171, line 5, leave out from "the" to end of line 11 and insert "person to whom it is disclosed for any purpose other than that for which it is disclosed.
	( ) A public authority must not make a disclosure under this section unless it is satisfied that the making of the disclosure is proportionate to what is sought to be achieved by it."
	On Question, amendments agreed to.
	[Amendment No. 188 not moved.]

Bali

Baroness Symons of Vernham Dean: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Foreign Secretary.
	"With permission, Mr Speaker, I should like to make a Statement about the terrorist attack in Bali on Saturday 12th October.
	"In his Statement to the House last Tuesday, my right honourable friend the Prime Minister set out the circumstances as we then knew them about the blast and its consequences. The most up-to-date information is this.
	"In total, more than 180 people of many nationalities are thought to have died in the attack. Of those, at least 120 were Australian. Many Indonesians died. Of the British citizens caught up in the blast, 11 are now confirmed as dead and a further 22 are missing—sadly, presumed to be dead. At least 27 British citizens were injured, a number of whom have been medevaced to Australia, Singapore and Hong Kong. There may be other British injured among the unidentified in intensive care.
	"The House joined the Prime Minister last week in sending its deepest sympathies to the relatives of the victims. It is every parent's worst nightmare to hear that their sons and daughters have been swept up in a tragedy. And when bereavement is compounded by having to travel half way across the world to identify loved ones, the experience is truly unimaginable.
	"Yesterday we joined with the people of Australia who held a day of national mourning for this, the worst terrorist outrage in that country's history. Here flags were flown at half-mast on Buckingham Palace and on our Embassies and High Commissions around the world. The Australian High Commission is arranging a memorial service in St Paul's on 25th October. The Indonesian Embassy will be holding a commemorative ceremony on 22nd October. The Government will organise a British memorial service. We shall be consulting the families about what they think would be most appropriate.
	"Let me now update the House on the action we have taken to assist those injured and the relatives and close friends of all who were victims in this atrocity. The British Honorary Consulate in Bali provided the initial assistance to survivors of the blast, and to victims' relatives. This was reinforced early on Sunday 13th October by the British Consul and then by the Ambassador, Richard Gozney, other staff, and volunteers from the British community. These staff and volunteers have worked tirelessly and I pay my tribute to them.
	"However, on Thursday I learnt of complaints by some families that they had not received the service we should have provided. I asked my noble friend Baroness Amos, who was already travelling to Bali, to talk to all the families concerned and to make her own assessment about the complaints. In the light of this, my noble friend apologised direct to the families concerned.
	"I reinforced that apology on Friday and would like to repeat it in the House. I am very sorry that shortcomings in getting sufficient extra staff on the ground in Bali early enough last week exacerbated the terrible burden the families were under in any event. As of today, there are 15 British officials in Bali, and 32 British police officers—including experienced family liaison officers and anti-terrorist experts working with the Indonesian and Australian police on the investigation into the attack itself. In London the emergency consular unit established overnight on Saturday 12th October, and working with New Scotland Yard, has continued in operation.
	"Last Wednesday, I announced a package of measures designed to help relatives to travel to where their loved ones were being treated, or to where victims had died. The scheme—similar to that put in place after September 11th last year—covers the repatriation of the remains of those who died, and the medical evacuation of the injured.
	"The FCO will pay the costs concerned wherever an insurance policy does not already cover them. I decided on these exceptional measures because of the exceptional nature of terrorism, in which individuals are random victims of attacks directed at society as a whole. As for the future, we shall be working urgently with the insurance industry and others to see how between us we can ensure that the pain of victims of terrorism is not made worse by financial hardship.
	"Immediately after the Bali attack, we advised against all travel to Bali and all non-essential travel to Indonesia. On 17th October I announced a further strengthening of our travel advice, warning against any travel at all to Indonesia as a whole. I also advised UK citizens in Indonesia to consider leaving if their presence was not essential, and authorised the withdrawal of some dependants and non-essential staff from our Embassy in Jakarta.
	"On 18th October we amended our travel advice to other countries in South East Asia, urging UK nationals to exercise extreme caution. Sadly, further attacks cannot be ruled out. In the light of additional intelligence assessed this morning, I am strengthening the travel advice still further by giving additional warnings about threats to UK nationals at specific locations in Indonesia. That travel advice is being issued now. It is available on the FCO's website.
	"Let me now deal with questions about travel advice before 12th October. I am placing in the Library of the House the travel advice issued by the Foreign and Commonwealth Office and British Embassy in Jakarta in respect of Indonesia before 12th October, and the equivalent advice issued by the United States and Australian governments.
	"Many of the relevant judgments in travel advice of this kind are based upon intelligence. In the light of the atrocity on 12th October, the families and others have asked whether there was any intelligence which could have led us to issue specific warnings against travel to, or staying in, Bali. If I had lost a member of my family I would be asking such questions. Indeed, as Foreign Secretary, it is my responsibility to ask such questions.
	"Like everyone else, I dearly wish that there had been intelligence which could have prevented this atrocity and its appalling consequences. But the answer, sadly, is that there was none. As my right honourable friend the Prime Minister told the House last Tuesday, 'we had no specific intelligence relating to the attacks in Bali'.
	"As is now well known, it is the case that there was received in late September a generic threat to a number of cities and provinces in Indonesia, including Bali, but covering altogether 55 per cent of the land mass of Indonesia and 100 million of its population. As my Australian counterpart, Alexander Downer, told the Australian Parliament on 17th October, these threats 'were non-specific and broad based across Indonesia'.
	"There has also been a question raised about the Travel Advisory issued by the United States Department of State on 10th October. Let me explain to the House what this was. The Advisory was a 'world-wide caution' of a kind first issued by the United States after September 11th last year. It alerted United States citizens to the need to remain vigilant in the face of terrorist threats. It was revised on 10th October this year following an audio tape broadcast attributed to Osama bin Laden. Issued only two days before the attack in Bali, it contained no reference to Bali, Indonesia or even South East Asia.
	"We also received a classified warning to a similar effect from the US on the same day. It too had no reference to Bali, Indonesia or South East Asia. Since our travel advice to Indonesia, last updated in this country on 27th August 2002, already contained a clear warning to travellers to Indonesia about terrorist threats, we judged that there was no case for amending it further in the light of the United States Advisory.
	"The United States, Australia and the United Kingdom all received similar intelligence in respect of Indonesia, but making their own independent judgments about this, all came to similar conclusions about travel to Indonesia. None of us had concluded that it was unsafe to travel to or remain in Bali.
	"Both as Home Secretary and now as Foreign Secretary I have worked closely over the last five and a half years with all three of our intelligence agencies. Their standard of professionalism and competence is second to none. They pick up literally thousands of pieces of intelligence. These vary from material provided by human sources, that provided by secret technical means and material that is openly available to the public, and sometimes just gossip.
	"Terrorist groups operate in secret. They are also often skilled in counter-intelligence techniques and may be feeding false intelligence to compromise a source or direct law enforcement resources to the wrong place. So the raw intelligence has to be skilfully and carefully assessed before judgments can be made upon it. I believe, on the basis of what I have seen, that the correct judgments were made about the available streams of intelligence before 12th October. There were generic threats. There was no information which could have enabled us to warn in advance of this atrocity.
	"But, Mr Speaker, I do not want the relatives of those who died in this atrocity, nor those injured, to have nagging anxieties about whether different judgments should have been made. The Intelligence and Security Committee was established by Act of this Parliament to scrutinise the work of our intelligence agencies. Through the Prime Minister, it reports regularly to Parliament. It is made up of senior and respected Members of both Houses of Parliament. It happens that the ISC is at present in Canberra on a long-planned trip. This morning I spoke to the chairman of the ISC, my right honourable friend the Member for Dewsbury, who had just arrived there. I told her that I had asked the Intelligence Co-ordinator in the Cabinet Office to ensure that all intelligence was made available to her committee. The ISC will of course consider this and then reach its own conclusion upon it.
	"The atrocity in Kuta was a brutal reminder that the campaign against terrorism did not end with the removal of the Taliban. The reality is that our campaign will take years, perhaps even decades.
	"In Indonesia, our immediate aim is to help the Indonesian Government act quickly to deal with the terrorist threat. We are already discussing how we can help through an intensified programme of counter-terrorism assistance.
	"My noble friend Lady Amos and the British Ambassador met President Megawati this morning in Jakarta. My noble friend was assured by the president that the Indonesian Government were determined to take swift and decisive action against those responsible for these attacks. President Megawati has already signed an emergency decree strengthening police powers to detain suspects and to enable the courts to make use of intelligence.
	"The Indonesian authorities have also taken action against known extremist groups. On 19th October, they arrested the founder of Jemaah Islamiyah, Abubakar Bashir.
	"The atrocity in Bali confirmed that our citizens are vulnerable wherever they are in the world. The terrorist's aim is to defeat the universal values of the United Nations of tolerance, freedom and respect for human life and replace them with brutality, fear and ethnic and religious hatred. I believe that the Australian Prime Minister, Mr Howard, captured the international mood when he called on the world to pursue the campaign against terrorism with 'unrelenting vigour'.
	"Our grief at what happened is enormous, but our determination is unwavering".
	My Lords, that concludes the Statement.

Lord Howell of Guildford: My Lords, like all noble Lords, I am extremely grateful to the noble Baroness for repeating the detailed Statement made by the Foreign and Commonwealth Secretary. At the outset, I want to emphasise—it is hardly necessary—that in no sense do we regard this as a party issue or one to be a matter of debate between the parties. It is much too tragic, big and serious an issue for that.
	Furthermore, we appreciate that we must await the return of the noble Baroness, Lady Amos, from the difficult mission which she has been performing ably in Bali. As the Statement points out, she has creditably and frankly apologised for certain shortcomings which arose and which we hope will be put right in case they are needed in future.
	The fact that the Statement is being made today indicates that certain questions need clarification beyond doubt in both the interests of the public and those bereaved. We on this side of the House fully understand about general or generic warnings, over-reaction to any of which plays into the hands of terrorists. Moreover, when one is dealing with thousands of items of intelligence, it is virtually impossible to expect open and public warnings to tourists and everyone else each time a rumour or warning comes through. It may be a hoax or even intended to achieve a result without a real incident taking place.
	I welcome the setting up of the inquiry by the Intelligence and Security Committee. I hope it will be swift and that we in your Lordships' House will have an opportunity to debate it. Nevertheless, I want to press some questions and I hope that the noble Baroness will have no difficulty in answering them.
	First, are the noble Baroness and the Foreign Secretary in the Statement dismissing completely, beyond all doubt and peradventure, that there ever was a CIA briefing two days before the events in Bali—that is, on 10th October—which mentioned Bali as a target and urged night clubs to be avoided? That was a widespread report and I hope that it is untrue. If it is untrue, could the Minister once again confirm that in none of the reports she has mentioned was reference made to night clubs or to Bali? If there were a report, it would be almost specific.
	Secondly, will she confirm that on 9th September warnings were given in general terms to US nationals about the Bali region? Was it stated that the area was becoming high risk, but were they, too, regarded as insufficiently specific to merit further action? Were there warnings, as has been suggested, that six specific islands in the Indonesian archipelago of 6,000, which included Bali, were about to be a target? That would be specific and one would like to hear a firm and definitive answer, removing all the nagging worries, which the Statement rightly mentions.
	Thirdly, are any lessons being immediately drawn about the procedure for issuing travel warnings? Will they be revised? Fourthly, will the Minister confirm that the Jemaah Islamiyah, apparently a vicious group, is currently proscribed in this country? If not, is the intention now to do so?
	The noble Baroness, Lady Amos, when in Bali mentioned the thought of setting up a permanent disaster relief team which would be mobilised in such instances, which I fear may be repeated. Will the Minister assure us that we will be able further to examine that idea, perhaps when the noble Baroness, Lady Amos, returns? We would like to see how it might shape up and develop so that we can all learn lessons from this horrific atrocity in the grim knowledge that the likelihood is that it will happen again.
	Finally, I note—and I believe that I will have the Minister's agreement—that the atrocity was committed not so much against Americans, two of whom were slaughtered, but against the citizens of the free and open world generally; Australians, Swedish, British and many other nationalities. Does that not confirm that the horrific attack on New York and Washington on 9/11 was not just an attack on quirks in American foreign policy—not something that could be put right by a sudden change in Washington's policy approach—but an indication that we are dealing with a world-wide murderous assault associated in some ways, rather sickly and unfairly, with Islam against the entire pattern of liberal values of the civilised world? We must therefore be on our guard everywhere and anywhere, as never before, to defeat such killing and evil.
	Those are the comments I want to make and I should be grateful if the Minister could answer my questions.

Lord Wallace of Saltaire: My Lords, I, too, thank the Minister for repeating the Statement. First, I should like a brief assurance that the papers to which the Minister has referred will be placed in the Library of both Houses. I assume that they will be.
	We all share the shock of what happened in Bali. I am one of the hundreds of thousands of British people who have been with their families on holiday in Bali in recent years. It is an extremely popular holiday spot. The island is heavily dependent on tourism. One consideration as we judge our appropriate response to this incident must be that we do not want to ruin the economies of such countries by banning Western tourists from going there.
	We appreciate that it is possible to criticise the Government's response in assisting relatives of the victims for not being fast enough. However, in such circumstances it is always difficult to provide early assistance. We are grateful to the Government for the efforts that they are now making to assist those who are affected.
	We on these Benches recognise that there is always a problem with intelligence in terms of "noise". One receives a huge amount of information and a number of unspecific warnings, and one has to sort out which are the most serious. I attended a conference in Washington in mid-September with Indonesian and Singaporean participants, who said clearly that we had to recognise that their countries were at risk from terrorist groups. That is clearly stated, but it is difficult to say when, how, what, and under what circumstances.
	There are unavoidable risks in an open, global world for all who travel around. We need to remember our own experience. London was for many years a pretty unsafe place to visit during the IRA campaign. Manchester and Birmingham were not entirely safe either. I have a vivid memory of my son and many of his classmates being trapped in Westminster underground station when the IRA launched its mortar bomb attack on No. 10. We should have been extremely upset if at that period a number of other governments had issued warnings to their citizens that they should not under any circumstances visit the United Kingdom.
	We should also have received protests from the United States if, in the year when a number of British tourists visiting Florida were attacked and one or two were killed, the British Government had issued instructions that no British tourist should visit Florida. We have to be very measured in our response. We must recognise that under these circumstances one cannot guarantee that all tourists will always be entirely safe.
	It is very important not to shut the developing world off from the developed world. That would be partly to grant the terrorists' aim: to close down our open world and to encourage a divide between the rich world and the poor.
	The Statement refers to our immediate response. I want to ask the Minister about the thinking as regards our longer term response. The Statement says that our campaign will take years, perhaps even decades. It seems important, therefore, as in Northern Ireland, to have a strategy which is not simply one of counter-terrorism. It should deal also with dialogue, with building better relationships between potentially hostile communities and between different religions—between Catholics and Protestants in Northern Ireland—and with building links between the developed world and moderate Islam. Do the Government have such strategies under discussion?
	Finally, mention was made of the Intelligence and Security Committee. We welcome the attention that the Government are now giving to that. Have they considered that now may be the time to make that committee—which to some extent hangs in limbo between government, the executive and the legislature—a formal Joint Committee of both Houses of Parliament? That would make it clearer that it is part of the normal processes of parliamentary accountability.

Baroness Symons of Vernham Dean: My Lords, I thank both noble Lords for their measured responses to the Statement. I want to say how pleased I am to hear the noble Lord, Lord Howell, say that this is not a party-political issue. As he said, it is far too tragic. I thank him for his kind words for my noble friend Lady Amos—who is indeed working in very difficult circumstances and learning the lessons of the last few days.
	As the Statement indicated, we presently have some 15 diplomats in Bali. They have not all come from Jakarta; they have been drawn from around the region. We have drawn on the expertise of those available in the region in our attempt now to get the best support that we can to the families.
	I thank both noble Lords for the way in which they handled questions of intelligence. The noble Lord, Lord Howell, is right: it is difficult to discuss these matters openly. Some intelligence may be there for hoax purposes; it may be there deliberately to direct attention away from the real intentions of groups of terrorists. I thank the noble Lord for the way in which he dealt with the issue.
	The noble Lord raised the question of the swiftness with which the ISC will report. As he would expect, that is a matter for the ISC. I imagine that it will want to deal with the matter fairly quickly, although that is for the committee to decide. I shall draw the noble Lord's remarks to the attention of my right honourable and honourable friends in another place.
	The noble Lord, Lord Wallace of Saltaire, asked whether it is time for the ISC to become a formal Joint Committee of both Houses. Again, that is a matter for the committee itself to consider. However, I shall draw his comments to the attention of my right honourable and honourable friends.
	I turn to the questions raised about intelligence. Given what the noble Lord said about understanding the sensitivities involved, I know that he will understand if I cannot always go into as much detail openly on the Floor of the House as might be possible in other circumstances. That said, there has been no attempt to dismiss any of the briefing. The warning, referred to on a number of occasions, from our friends in the State Department on 10th October was what is called a world-wide caution. I have the papers in front of me and they do not mention Bali. I am happy to show that to the noble Lords, Lord Howell and Lord Wallace of Saltaire, at the close of these exchanges, but they will also find them in the Library.
	The reference is not specific to Bali. It makes the point about giving Americans warnings, including facilities where Americans are generally known to congregate, such as clubs, restaurants, places of worship, schools or outdoor recreational events. But it does not relate that to Bali or to Indonesia, as my right honourable friend's Statement made clear.
	The noble Lord raised questions in relation to 9th September. Again, I am happy to show the noble Lord the United States' advisory of that date. It is a very general advisory and it does not refer to Bali. Again, I have it in front of me and I am happy to show both noble Lords the statements, which I hope will reassure them on those points. Where there were references to particular places in Indonesia, as I hope my right honourable friend's Statement makes clear, these were of a very general nature in intelligence terms. I am sure that when the ISC has the opportunity to look at that, it will be able to bear out what I am telling the House.
	Turning to questions of procedure in general, both noble Lords raised questions about how we deal with such appalling incidents when they arise. As the noble Lord, Lord Wallace of Saltaire, mentioned, my noble friend made reference to attempting to get some standing arrangements in place. I hope that the Statement has made clear that my right honourable friend the Foreign Secretary believes that we ought to have further discussions with, for example, the insurance industry about such arrangements. We believe that it is important to consider what we might be able to do in terms of being able to get people with particular expertise in these terrible and appalling atrocities to places very quickly to help bereaved families and those waiting for information. We are talking about a particular type of skill in terms of counselling. We are examining ways of trying to take that forward.
	Jemaah Islamiyah is not proscribed in the United Kingdom as yet, but, as the noble Lord would expect, this matter is under urgent consideration. I agree with the noble Lord when he talks about a "world-wide murderous assault". Yes, it is. As my right honourable friend said in his Statement, it will take years to try to come to grips with this kind of terrible, indiscriminate terrorism. Indeed, it may even take decades to defeat this sort of terrorism. However, as the Statement made absolutely clear, we shall be unwavering in our determination so to do.
	I return to the points made by the noble Lord, Lord Wallace of Saltaire. It is, of course, important to deal with this situation in a number of different ways. Yes, we can do so through dialogue. The noble Lord is right to suggest that it is important not to cut off certain parts of the world. However, it is also most important to keep our own citizens as safe as we can. Therefore, the role of the intelligence services in sifting the information that we have is vitally important in making our own people safe, and, as the noble Lord indicated, ensuring that the passage of commerce, travel, and exchanges round the world is kept as intact as possible. There are many causes of terrorism in the world. We must do our best to tackle them at all levels.

Lord Hurd of Westwell: My Lords, perhaps I may join my noble friend and the noble Lord, Lord Wallace of Saltaire, in thanking the Minister for repeating a very full Statement; and, indeed, for the supplementary answers that she has just given. The noble Baroness's remarks about the long-haul situation surely sum it up. Does she agree that we are entering a period where there will be no such thing as total knowledge or safety? That applies especially at the present time when the Middle East and Asia are awash hour by hour with rumours, secret reports, and secret meetings. As Mr Alan Judd, who is very experienced in these matters, powerfully pointed out in the press yesterday, not even the most distinguished of intelligence services can be confident that they will be able to differentiate between fact and fantasy.
	I have a specific question for the noble Baroness about warnings. Does she agree that the Foreign Secretary has a particularly difficult task here: on the one hand, there are the obvious immediate dangers following this appalling atrocity but, on the other hand, he has to bear in mind what sometimes gets forgotten in immediate comment; namely, that in all these countries there are thousands of deeply-rooted British citizens? I have in mind India and Pakistan, which received such warnings in recent months, and now this has happened in Indonesia. However, this applies everywhere else. I am referring to people who are trading, teaching, or helping to develop aid projects, and so on, who are actually well-rooted in those countries. As the noble Baroness said, they have the right to be given specific warnings.
	Many of those people would then be in a good position—indeed, better than anyone else—to make up their own minds about their future plans. If they all packed their bags and left because of a general danger, does the noble Baroness agree that that would cause deep damage to this country and to the countries where those people live? Indeed, would she also agree that that would be a substantial second success for the terrorists—that being exactly what they have in mind? Is this not an important part of the balance that the Foreign Secretary has to strike?

Baroness Symons of Vernham Dean: My Lords, I entirely agree with the noble Lord, Lord Hurd, who better understands the situation than many of your Lordships, and who speaks with the experience of his own period in office. It is particularly true to say that now there can be no total knowledge and, therefore, no total safety as regards what is going on in the world. I stress to the House that it is up to citizens themselves to check with the Foreign Office over travel advisories, which do change on a daily basis. One cannot always rely on all parts of the travel industry to pass on such information. However, many in the industry do so, and are extremely conscientious in that respect. It is also the responsibility of the travelling citizen to acquaint himself with those travel advisories.
	The Foreign Secretary has the unenviable task of distinguishing between what may, on the one hand, be pure gossip, and, on the other, a hoax, as pointed out by the noble Lord, Lord Howell; or, indeed, what may be a substantial threat. He approaches that task on the advice of the intelligence community. I agree with what the noble Lord said about the thousands of British citizens living overseas, who have intimate knowledge of the countries within which they live. Where we believe that specific warnings are credible, they should be delivered to those citizens through the Foreign Office travel advisories. But if everyone tried to leave a country all at one time that might pose very particular problems, especially if we are talking about difficult outlying regions.
	However, I say this with a certain caution. Although none of us wish to do the terrorists' work for them, it is also very important that we do deliver as speedily and as accurately as we can what we genuinely believe are real matters of concern for those either in a certain country or travelling to such a country.

The Earl of Onslow: My Lords, I thank the Minister for repeating that excellent Statement. Does the noble Baroness agree that terrorism now is miles easier to accomplish than it was in the days when the Viceroy was assassinated in Phoenix Park, when the Tsar was murdered, or when Gabriel Princip killed Franz Ferdinand? Moreover, the damage that it can do now is far worse to human life and to our surroundings. One of the consequences of the Bali bomb to the people of that island has been the ruination of their economy. They will suffer far worse because the damage will last for much longer.
	I do not intend, or mean, to sound callous, because my words could be interpreted in that way. Australians, or English people, can go clubbing elsewhere. But the people in Bali will suffer. If they continue to suffer economically, they will become a further feeding ground for terrorism. However, that is an observation, not a question. In view of the increase in international terrorism and the fact that it looks as if Ireland might be going mildly pear-shaped yet again, is the Minister satisfied that the intelligence services have the money, the intellectual resources, and the intelligence people behind them to do the best that we shall undoubtedly demand of them?

Baroness Symons of Vernham Dean: My Lords, of course, with the explosion in international travel and the ease of communications, the ability to obtain the means to cause terrible physical damage is far greater now than some years ago. However, we also have electronic communications on the side of law and order. We are able to trace a great deal of what is happening in the world. In his Statement my right honourable friend spoke of the ways in which we are able to gather intelligence, in a very general way. Those, too, are very much more sophisticated than they used to be. In addition, we now have the ability to look at DNA that may be left at the scene of some of these apalling crimes in an attempt to track down who is responsible. The noble Earl is right, but our ability to track down these people has also improved and our determination to do so is absolute.
	The noble Earl said that the consequences for Bali are far worse. As a parent, I cannot imagine anything worse than losing a child in such an atrocity. It is about the worst human tragedy that could befall any of us. I am sure that the noble Earl will agree. However, I take his point about the consequences for Bali in terms of its economic future and security. It is enormously important that that is addressed. I hope that we will be able to discuss that further with my noble friend Lady Amos when she returns.
	The noble Earl asked whether I am satisfied that the security and intelligence services are properly resourced. They are resourced as well as Her Majesty's Government can currently provide. These issues are under constant review. I know from my period of close association with the intelligence services that there is always more that one can do with additional resources; that is axiomatic. I am confident that the Government's emphasis on obtaining the best possible service is also constant.

Enterprise Bill

Consideration of amendments on Report resumed.
	Clause 238 [Overseas disclosures]:
	[Amendment No. 189 not moved.]

Lord Sharman: moved Amendment No. 190:
	Page 172, line 13, at end insert—
	"( ) whether disclosure would include commercial information whose disclosure might significantly harm the legitimate business interests of the undertaking to which it relates"

Lord Sharman: My Lords, Amendments Nos. 189 to 191 deal with the disclosure of confidential commercial information to an overseas authority. As matters stand, where a UK agency is able to obtain commercial information that is subjective in terms of its competitive relevance, that information remains confidential. If such information were disclosed to an overseas authority under the Bill's provisions, the purpose of making the disclosure would by its very nature enable that information to enter the public domain in that foreign territory.
	Amendment No. 190 seeks to require that in making a decision on whether such information is to be disclosed, the Secretary of State should have regard to,
	"whether disclosure would include commercial information whose disclosure might significantly harm the legitimate business interests of the undertaking to which it relates".
	I cannot believe that it is the Government's intention that such a situation should prevail and that such information should find its way overseas into the public domain. I beg to move.

Lord Kingsland: My Lords, we raised this matter in Committee, where the noble Lord, Lord Sainsbury, said,
	"As the noble Lord, Lord Kingsland, said, the Joint Committee on Human Rights made some important recommendations to ensure that the overseas disclosure provisions were subject to even tighter safeguards. The committee recommended that the considerations that will be used by UK public authorities when making decisions on disclosure to overseas authorities should not be left to be drafted by the OFT, as currently required, but should be placed on the face of the Bill.
	The committee also recommended that the criteria should include a consideration on whether the disclosure being contemplated would be proportionate to a pressing social need that the disclosure would address, and whether the matter for which disclosure is sought is sufficiently serious to justify disclosure . . . The Government have listened carefully to these recommendations and agree to them".—[Official Report, 29/7/02; cols. 743-744.]
	The amendment that we tabled then addressed the recommendations made by the Joint Committee on Human Rights. It is encouraging to see that the Government are thinking about the needs raised in relation to disclosure by public authorities. We are not entirely satisfied that the Secretary of State is meeting our concerns. While we accept that he should be able to modify and add to the list of considerations, the protections under Clause 238(6) would be eroded if at a later stage any of the considerations were removed. We would not wish to see them added now for the purpose of enabling the Bill to obtain Royal Assent; and then removed at the earliest opportunity.

Lord McIntosh of Haringey: My Lords, I had better speak to Amendment No. 189 even though it was not moved, as the noble Lord, Lord Kingsland, has spoken to it. The argument hangs together for all three amendments. I shall speak first to government Amendment No. 191, which is designed to ensure that we have the desired read-across between Parts 8 and 9 of the Bill. Clause 238 permits a public authority to disclose information to an overseas authority for the purpose of facilitating investigations or the bringing of civil proceedings by that authority to enforce "relevant legislation".
	Relevant legislation is defined as the legislation to be covered by Part 9, and foreign legislation which is equivalent. The amendment will ensure that the legislation which is to be specified for the purposes of Community or domestic infringements in Part 8 will fall within the definition of "relevant legislation".
	Amendment No. 189 would add a set of considerations to Clause 238 to which the Secretary of State must have regard when considering whether to make a direction that a disclosure to an overseas public authority must not be made. I agree with the noble Lord, Lord Kingsland, that we must ensure that the overseas disclosure provisions are subject to adequate safeguards. That is why in Committee we added to the Bill a number of considerations to which a public authority must have regard before disclosing information to an overseas authority. Those considerations mirror in content those set out in this amendment. In addition to the considerations set out in Clause 238 a public authority must also have regard to the considerations set out in Clause 239.
	These considerations will ensure that information is disclosed only when public authorities are satisfied that the matter for which the information is requested is sufficiently serious rather than speculative and little more than a fishing expedition. Clause 238 also allows the Secretary of State to direct that a disclosure otherwise permitted by this clause must not be made if he considers that it is more appropriate for any investigation to be carried out or proceedings brought in the United Kingdom or in another specified country or territory. This power, which mirrors provisions in Section 18 of the Anti-terrorism, Crime and Security Act 2001, reserves the right of the Secretary of State to decide that disclosure may not be in the interest of the United Kingdom; for example, in circumstances where an overseas authority requests information that may be more appropriately restricted to an investigation by UK authorities. We anticipate that this power will be invoked sparingly.
	The role of the Secretary of State is therefore confined solely to protecting the legitimate jurisdictional interests of the UK and is quite distinct from the general duty that Part 9 places on public authorities that hold information to which Clause 232 applies to assess requests for disclosure against the considerations laid out in this clause and in Clause 239 before deciding whether to disclose information under this clause. It would not be consistent with the granting of such discretionary powers for the Secretary of State to have the ability to second guess how public authorities exercise their statutory duties.
	I turn to Amendment No. 190. I have every sympathy with the objective, but it is unnecessary. Clause 239 contains considerations which public authorities must have regard to before disclosing any specified information covered by Part 9, regardless of to whom it is being disclosed. Clause 239(3) requires consideration of the need to exclude from disclosure so far as practicable,
	"commercial information whose disclosure the authority thinks might significantly harm the legitimate business interests of the undertaking to which it relates".
	There is an equivalent consideration in respect of information relating to the private affairs of an individual. That subsection therefore has the same effect as the amendment moved by the noble Lord, Lord Sharman, but with the benefit of covering all disclosures of specified information, not just those to overseas authorities.

Lord Sharman: My Lords, I am grateful to the Minister for his response and his explanations. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey: moved Amendment No. 191:
	Page 172, line 35, at end insert—
	"(aa) any enactment or subordinate legislation specified in an order under section 206(2);
	(ab) any enactment or subordinate legislation specified in an order under section 207(3);"
	On Question, amendment agreed to.
	Schedule 16 [Third party appeals]:

Lord McIntosh of Haringey: moved Amendment No. 192:
	Page 258, line 5, at end insert "with the objective of"

Lord McIntosh of Haringey: My Lords, I shall speak also to Amendments Nos. 193, 197 and 205. I think the noble Lord, Lord Kingsland, may well move Amendment No. 196, as his name is attached to it.
	The "purpose of administration" was discussed at some length in Committee. The noble Lord, Lord Hunt of Wirral, expressed some concerns about the objective of rescuing the company, suggesting that this could exclude a company's most valuable assets—often its people and business. I stated at the time that I had some sympathy with those concerns and I agreed to consider the issue and come back with an appropriate amendment on Report. We have done just that. While we are not changing our policy on the issue—and have not been asked to do so—we agree that further clarification on the face of the Bill would be particularly useful to those charged with making administration work.
	Company rescue is at the heart of the revised administration procedure. It is, and always has been, our intention to ensure that viable companies do not fail unnecessarily. By that I mean that not only the legal entity alone is preserved, but at least a substantial part of the business of that company is also preserved with it. The noble Lord, Lord Hunt, referred in Committee to the former as "empty shells". As I have said before, it is not our policy that rescuing the company could mean simply keeping the legal entity alone intact. The Government tabled an amendment on that point, but we were happy to withdraw it and support Amendment No. 196 in the names of the noble Lords, Lord Kingsland and Lord Hunt, which makes the point crystal clear.
	In addition, in Committee I confirmed that we wished to make it clear that the administrator will not be required to pursue the first objective of rescuing the company if the second objective would provide a better result for the creditors of the company as a whole. It has been suggested that this could undermine company rescue by allowing and even encouraging administrators to sell off assets in a quick and dirty sale simply to cover the secured creditor's debts, justifying such actions as being better for the creditors in the short term—in other words, business as usual for receivers turned administrators. That is simply not true.
	The new purpose also does not imply that the administrator will be constrained to take the short-term view. Administrators working under the new purpose should weigh up the options in the light of their duty to the creditors as a whole. That could well result in preferring a long-term return over what could be realised in the short term.
	However, there may be times when company rescue is not the best option, when the medium to longer-term viability of the business is poor. We do not want the administrator to be constrained to attempting to rescue every company irrespective of whether there is a business worth preserving. We do not want an administrator to have to pursue a company rescue that may be reasonably practicable but would result in a lower return to creditors as a whole, which could have been a consequence of the current drafting of paragraph 3. One criticism that has been made against Chapter 11 in the United States is that it can lead to cycles of repeated failure and rescue of non-viable businesses. The amendment will allow an administrator the flexibility to provide the best result to all the creditors while still maintaining the primacy of company rescue.
	I am sure that we all agree that the changes that the Bill introduces to the way that floating charge holders can deal with their security marks a decisive break from the past. The Government's intention is that in all administrations the administrator should consider the possibility of rescuing the company. He must bear in mind the interests of all creditors when deciding how to deal with the company and its assets. While the Government and Parliament can set out the policy and legislative framework to achieve that, it is now for those involved—insolvency practitioners, lenders and others—to put it into practice.
	The administrator's opinion was also raised in Committee and is addressed in this group of amendments. The Government remain of the view that the administrator is best placed to judge whether a particular objective is reasonably practicable, in the light of his experience and professional judgment. In the light of concerns expressed during the debate, we have made it clear that what the administrator thinks should determine which objective is followed.
	The new paragraph 3 will therefore allow an administrator not to pursue the first objective if he thinks either that the second objective will achieve a better result for the creditors as a whole or that it is not reasonably practicable to achieve the first objective. This means that the creditors will not be disadvantaged in cases where the administrator thought it reasonably practicable to rescue the company as a going concern but the second objective would obtain a better return.
	The Opposition have tabled a number of amendments that similarly deal with the issue of company and business rescue, and whether it should be for the administrator to decide whether particular objectives are reasonably practicable. I believe that these matters have all been addressed in the Government's amendments. I therefore hope that the other amendments will not be pressed. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I listened carefully to the Minister. Much of what he said met the thrust of the amendments, but I should like clarification on two points. Amendment No. 194 makes clear that the rescue does not have to cover the company as a whole, by inserting,
	"and the whole or part of its business".
	It is not clear to me that the government amendments will give an administrative receiver or administrator the chance to deal even-handedly with the whole or part of the company's business.
	The second point relates to the administrator's professional judgment. I was pleased to hear the Minister refer to that as the pre-eminent issue. That is very important. I am not clear about how the Government's amendments deal with the issue of "in his opinion". Amendment No. 199, tabled by my noble friends and myself, makes it clear by inserting "in his opinion". Part of the Government's amendment seems to meet that, but not all of it.
	I should be grateful if the Minister could clarify those two points: whether the whole or part of the company is covered; and whether the administrator's opinion is pre-eminent. I am not sure that either point is covered.

Lord Hoffmann: My Lords, I am contributing to the debate having been for seven years a judge of the Chancery Division and having had some experience of dealing with receiverships and administrations. I am anxious about two aspects of the amendments.
	The centrepiece of this area of the Bill is the part of the schedule that deals with the purposes of administration. When I first read those paragraphs, they appeared admirably drafted and entirely clear, setting out in the proper order what those purposes should be. I would have thought that no judge would experience any difficulty understanding what the paragraphs meant and applying them in a practical and common-sense way. As the Minister said, the great break with the past that those paragraphs represent is giving primacy to the prospects of rescuing the company.
	As I said, two aspects of the amendments concern me. The first is the provision that now appears to place the objective of rescuing the company more or less on a par with the objective of achieving a better result for the company's creditors as a whole. It seems to me that judges faced with these clauses as they stand would in no way insist on the rescue being pursued in circumstances where this was not going to do anybody any good. However, to put the realisation of the assets in the old style—for the benefit of the creditors—as on an equal footing with the rescue seems to me to be giving a wrong signal to the profession.
	The other aspect is the provision saying that what really matters is the opinion of the administrator. In my experience as a judge, the greatest respect has always been paid to the opinion of the administrator. He was the man who was in touch with the facts and who had to make the practical day-to-day decisions. It would be rare indeed for a judge to say, "No, we think that you are doing it the wrong way". If, with hindsight, one were looking at any criticism of something that the administrator has done, it would be virtually impossible to hold any administrator liable for something that he had done in good faith on the footing that the judge thought that it would have been better to take some other course.
	What this amendment does, however, is to put the whole matter, even as to the future, into the hands of the opinion of the administrator. The amendment therefore precludes interested parties from coming to the court and saying, "Let us examine this matter rationally. It appears that the administrator is going about it the wrong way. It would be better, to achieve the statutory objectives, if it were done differently". The court would then be able to assess that matter. There might be occasions when the court, giving full weight to the experience and knowledge of the administrator, feels that it has to say, "No. It is quite clear that, in the best of faith, you are going about this the wrong way and you ought to do something different. The company can be rescued even though you seem to have formed the opinion that it cannot".
	These amendments seem to take that power out of the hands of the court entirely and leave everything to the opinion of the administrator. In my view, both those changes represent retrograde steps.

Lord Kingsland: My Lords, an intervention in the debates of your Lordships' House by the noble and learned Lord, Lord Hoffmann, is always an occasion for celebration. I know that the Minister will be keen to reply to the testing and apposite observations of the noble and learned Lord. I rise simply to thank the Minister and his officials for their careful work in response to the amendments that we tabled at Committee stage.

Lord Sharman: My Lords, I rise simply to echo the remarks of the noble Lord, Lord Kingsland. The Minister and the Government have come a very long way in meeting our concerns on this matter and I am grateful.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Kingsland, is teasing me: the thought of arguing a point of law or legislative text with the noble and learned Lord, Lord Hoffmann, fills me with dread. The noble and learned Lord has known that for the 50 years that I have known him. Nevertheless, I shall do my best.
	I am grateful for the comments of the noble Lords, Lord Kingsland and Lord Sharman, and I am interested in the points made by the noble Lord, Lord Hodgson, and the noble and learned Lord, Lord Hoffmann. I am not sure, however, that I understood the first point made by the noble Lord, Lord Hodgson. He asked whether Amendment No. 194 provided for the administrator to seek to rescue a whole or a part of the business.

Lord Hodgson of Astley Abbotts: My Lords, I appreciate the points made by the Minister, my noble friend Lord Kingsland and the noble Lord, Lord Sharman. The question was whether the Minister's comments covered the essence of Amendment No. 194. Can the administrator rescue a part of the business, or is he still compelled to rescue "the business" or "the whole of the business"?

Lord McIntosh of Haringey: My Lords, I said "part" in my speech. I think that I had better write to the noble Lord, Lord Hodgson, about how that is implemented in paragraph 3 as redrafted. I asked for paragraph 3 as incorporating the Government's amendments to be sent round, but unfortunately I only asked for it to be sent round to the Front Benches. I have now given it to the noble and learned Lord, Lord Hoffmann, but the noble Lord, Lord Hodgson, did not have a copy.
	I hope that, when the noble and learned Lord, Lord Hoffmann, reads it, he will agree that it is not the case that rescue is "more or less on a par"—I hope that I am quoting him correctly—with the interests of creditors. I hope that sub-paragraphs (3) and (4) make that clear. The administrator must perform his function with the objective specified in sub-paragraph (1)(a)—that is, rescuing the company as a going concern—unless he thinks that it is not reasonably practical to achieve that. In other words, although the interests of creditors are of course important, subject to sub-paragraph (4), they are not on a par with the company rescue. These are in an order of priority.
	I think that the second point made by the noble Lord, Lord Hodgson, was on the question of "think" and "reasonably believe". The point about the wording in the Bill is that it does not second guess the administrator's professional or commercial judgment. If necessary, we would expect the courts to assess whether the office holder, in this case the administrator, has been rational in his decision. We are not seeking to apply any other test.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendment No. 193:
	Page 258, line 6, leave out "with the objective of"
	On Question, amendment agreed to.
	[Amendment No. 194 not moved.]
	[Amendment No. 195 had been withdrawn from the Marshalled List.]

Lord Kingsland: moved Amendment No. 196:
	Page 258, line 6, after "company" insert "as a going concern"
	On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendment No. 197:
	Page 258, line 7, leave out from beginning to "achieving" in line 8.
	On Question, amendment agreed to.
	[Amendments Nos. 198 to 200 not moved.]

Lord McIntosh of Haringey: moved Amendment No. 201:
	Page 258, leave out lines 11 and 12.
	On Question, amendment agreed to.
	[Amendments Nos. 202 to 204 not moved.]

Lord McIntosh of Haringey: moved Amendment No. 205:
	Page 258, line 15, leave out sub-paragraph (2) and insert—
	"(2) Subject to sub-paragraph (4), the administrator of a company must perform his functions in the interests of the company's creditors as a whole.
	(3) The administrator must perform his functions with the objective specified in sub-paragraph (1)(a) unless he thinks either—
	(a) that it is not reasonably practicable to achieve that objective, or
	(b) that the objective specified in sub-paragraph (1)(b) would achieve a better result for the company's creditors as a whole.
	(4) The administrator may perform his functions with the objective specified in sub-paragraph (1)(c) only if—
	(a) he thinks that it is not reasonably practicable to achieve either of the objectives specified in sub-paragraph (1)(a) and (b), and
	(b) he does not unnecessarily harm the interests of the creditors of the company as a whole."
	On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendment No. 206:
	Page 258, line 19, at end insert—
	"3A The administrator of a company must perform his functions as quickly and efficiently as is reasonably practicable."

Lord McIntosh of Haringey: My Lords, in moving Amendment No. 206, I should also like to speak to Amendments Nos. 210, 212, 213, 214, 215, 224, 226 and 230. I ask that the noble Lords, Lord Kingsland and Lord Hunt, move Amendment No. 229 from the Opposition Front Bench as it is in their names as well as that of the Government.
	In Committee, I described the subject of time scales for administration as a "major issue". The subject certainly attracted a lot of attention and discussion both during our debate in Committee and in debate in another place. I acknowledge the force of the arguments that have been put to us. Currently, no limits are placed on the length of administration. This has led to some criticism that some administrations have gone on too long, and that the lack of certainty of when the process will conclude can be a distinct disincentive for businesses and lenders when considering administration.
	The need for the inclusion of a time limit for the process of administration has been generally accepted but, as I explained in Committee, it is important that limits are set at a level that reflects the practicalities of administration and at a length that commands the confidence of those with an interest in administration. As a result of the clear concerns surrounding the issue of the time limits, the Government undertook to give this matter further consideration in consultation with interested parties and to table any appropriate amendments that were identified as necessary.
	Officials have met with the relevant interested parties, not only the insolvency profession itself but also representatives of both lenders and business, including the CBI, the British Bankers' Association and the Finance and Leasing Association. Those discussions were constructive and these amendments take into account the points made.
	We are all in agreement that the Bill should be amended so that the administrator will now have up to 12 months, as opposed to three months currently proposed in the Bill, before having to seek an extension from either the creditors or the court and the Government were happy to withdraw their own amendment and be associated with Amendment No. 229 in the name of the Opposition and the Government. Amendment No. 230 will allow creditors to extend this period by a further six months, rather than three as the Bill presently states, while the court will continue to be able to extend the administration for a specified period.
	The amendments also lengthen the time limits for the administrator bringing forward his proposals and holding a creditors' meeting. Proposals will now have to be brought forward within eight weeks and a creditors' meeting held within 10 weeks compared with the Bill's current provisions of 28 days and six weeks respectively.
	Although we accept the need to lengthen the time limits we are keen for administrations to be concluded as quickly as is reasonably practicable in the circumstances of each individual case. The time limits should not become the norm. For example, we would expect administrations that are straightforward because of their size or lack of complexity, to be capable of being completed within the new initial 12-month period.
	In order to reflect this approach, new paragraph 3A proposed in Amendment No. 206 places a general duty on the administrator to perform his functions as quickly and efficiently as reasonably practicable. We have also included a specific duty for the administrator to act,
	"as soon as is reasonably practicable",
	in bringing forward his proposals to creditors and calling a creditors' meeting. Our intention remains for streamlined administration to be a quick and practical business recovery vehicle that will attract the confidence of practitioners, companies of all sizes, lenders and the business community as a whole. Striking the right balance on time limits between the concerns of all those with an interest in administration is a key element in meeting that objective. We believe that the amendments achieve that balance.
	However, while the Government and Opposition Members were all in agreement on overall time limits for an administration, the same cannot be said for Opposition Amendments Nos. 211 and 216, which seek to extend the period during which the administrator must send out proposals and hold an initial creditors' meeting to three months and four months respectively. I am a little surprised at those amendments in view of the constructive discussions that officials had with not only the insolvency profession itself but also representatives of both lenders and business, including the CBI, the British Bankers' Association and the Finance and Leasing Association. During the discussions a general consensus was reached, and it was that consensus that formed the basis of the Government's amendments.
	In most cases it should be reasonable to expect the administrator to send proposals out to creditors and to hold an initial creditors' meeting within the time limits that we are now proposing. In those exceptional cases where the proposals are likely to take longer to prepare, perhaps as regards a particularly large company or one with a complex business structure, the administrator will continue to have recourse to the creditors and/or the court to agree an extension to the time limits. I beg to move.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister for the work that his officials have done over the past few days to try to resolve a number of issues. People have worked exceedingly hard and a series of meetings have been held. However, these concerns were expressed when the legislation was debated in the other place over some considerable time. I accept criticism all the time but I hope that on reflection the Minister will not criticise me as severely as he just has for not yet having adapted to amendments that were tabled only last week. It has taken a little time to assimilate all the hyper activity that has occurred over the past few days and weeks.
	I refer, first, to Amendment No. 206, which the Minister has just moved and which states:
	"The administrator of a company must perform his functions as quickly and efficiently as is reasonably practicable".
	Who could possibly oppose the amendment? Its purpose is recognised and is laudable. However, I am advised by the many legal brains who have focused on it that its actual wording imposes something of an impossibly high standard in that every administrator must always, every minute of every day and every day of every week and month, perform with the greatest reasonably practicable speed and efficiency. It is suggested that he should be required to perform with such speed and efficiency as would be expected of a reasonably competent insolvency practitioner in the circumstances of the particular case.
	In addition, that standard of performance should be subject to the fundamental duty of the administrator to act in the interests of the company's creditors as a whole as cases may occur where quick action may not lead to the best outcome for creditors. We have already dealt with the consequences of some of the legal phraseology in the notable and effective contribution of the noble and learned Lord, Lord Hoffmann.
	All ER (D) 393 (Jul). All I would say to the Minister is that any legislation which he now proposes will be held, in my belief, alongside that very clear judgment. Mr Justice Neuberger said:
	"As a matter of ordinary statutory interpretation, s 108 of the 1986 Act gave the court discretion as to whether or not to remove a liquidator. In such cases, the court might have to carry out a balancing exercise. On one hand, it would expect any liquidator to be efficient, vigorous and unbiased in his conduct of the liquidation, and should have no hesitation in removing him if it was satisfied that he did not live up to expectations. On the other hand, if the liquidator was honest, the court should think carefully before removing him, and it was not enough to say that his conduct had fallen short of ideal, as that would encourage disgruntled creditors to make such applications when their agent was not appointed a liquidator".
	I believe that the Minister will appreciate that that is a clear statement of the circumstances in which the court would use its existing power to remove the practitioner.
	I hope that between now and next Monday the Minister will give some thought to whether the wording of Amendment No. 206 does not impose an impossibly high standard and may also conflict with existing judicial directives and ratio decidendi on that particular aspect.
	I am very grateful to the Minister, as I said previously, for proposing the time limits in the government amendments; they are welcomed and broadly acceptable. However, he referred to Amendments Nos. 211 and 216. Amendment No. 211 would leave out "28 days" and insert "three months" and Amendment No. 216 would leave out "six weeks" and insert "four months". I realise that the purpose of these amendments is to set realistic and achievable targets. I am grateful to the Minister for having said that he will provide limits that will command a wider consensus and for the extent of the consultations. It might be helpful if he reminded the House of the details of those consultations; I believe that a number of parties may not have been consulted during the time available.
	Amendment No. 227 would leave out paragraphs 76 to 78. As the Minister knows, we should have preferred there to be no time limit relating to administrations. In relation to complicated administrations, in many cases one year would be far too short. In the time available, I have not yet been able to consult the practitioners sufficiently on the end time limits, but I should like to do so. I realise—such is the situation in this Session—that that means before next Monday; however, I hope that the Minister will allow me sufficient time to consult on the final backstop time limit. I am very grateful to him and his colleagues for having advanced a more realistic approach to the time limits following consultation.

Lord Sharman: My Lords, from these Benches, I, too, express my thanks and recognition of the extremely hard work that has been done on the time limits. We have moved forward a considerable distance in that regard and, by and large, I am content with where we are.
	I have one comment to make on Amendment No. 206. Until the noble Lord, Lord Hunt, spoke, I was content with that amendment. My point follows the line of the questions raised by the noble Lord. I should appreciate confirmation from the Minister that the responsibility should be read in conjunction with paragraph 3 and that it is almost subsidiary to paragraph 3(2), which states:
	"The administrator must perform his functions . . . in the interests of the creditors of the company as a whole".
	The amendment will add that that should be done,
	"as quickly and efficiently as is reasonably practicable".
	If the arrangement worked in that way, I should be a little more content than when I started.

Lord McIntosh of Haringey: My Lords, I am grateful to both noble Lords for their general welcome to the amendments. If I sounded critical of Amendments Nos. 211 and 216, I am sorry; of course it is true that the consultation has taken time over the summer and that the amendments were tabled during a short period. If that means that the noble Lord, Lord Hunt, is now content and that we have answered the points raised in Amendments Nos. 211 and 216, I am very happy.
	I do not believe that Amendment No. 206 imposes an impossibly high standard. I do not see it as saying that the administrator somehow has to be active 24 hours a day, seven days a week, in order to perform his functions quickly and efficiently. The relevant phrase is "as reasonably practicable" and we believe that the courts will take a practical line on construing the new duty. The duty of a given administrator is clearly to be interpreted in the light of what is reasonably practicable in the particular circumstances of a case. The same standards will not be not applied across all kinds and varieties of cases. We also believe that the courts are unlikely to entertain frivolous claims from applicants relating to trivial delay or delays that are unavoidable or cause no harm.
	At the end of the day there is a potential for conflict in this regard. Yes, there are time limits and, yes, we have agreed to extend a number of them. We have also recognised that the process of administration may be more complicated than was allowed for in our original time scales. There are other people—those affected by the process of administration—who want it to be as quick as possible. That is why Amendment No. 206 is necessary. That is also why—this responds to the later remarks of the noble Lord, Lord Hunt, on time limits—we believe that there should be time limits. The present procedure has very few time limits. It has tended to make administration appear slow. A key point that came out of our consultation is that administration takes too long and provides no certainty for creditors about when they might get paid; we are also concerned with creditors in this regard. We must reassure the lending community that we are not relaxing any controls relating to the speed of administration.
	Some of the critical views of the short time scales have been influenced by insolvency practitioners and those dealing with very large cases. I understand their interest. We believe that the time scales proposed in the amendment are adequate for dealing with many—if not most—cases without the need to go to court. We have taken soundings from those practitioners who specialise in smaller cases, who believe that the time scales will be more than adequate for cases at the smaller end of the market. That is why we want to add Amendment No. 206 to the Bill.
	I am not sure whether I have offered any further details about the consultation process. We of course consulted insolvency practitioners. As I said when I moved the amendment, we talked to the CBI, the British Bankers' Association, the Finance and Leasing Association and representatives of business.

Lord Hunt of Wirral: My Lords, it would help if the Minister's office could let me have details of those bodies that attended so that I can check that all necessary people who have expressed their concerns to me were involved in the consultation process; I am sure that they were. I do not want that information now but if I could have a list within 48 hours that would be helpful.

Lord McIntosh of Haringey: My Lords, I should be glad to do that as soon as I can and in advance of Third Reading next Monday. I believe that the general welcome justifies me in urging the House to agree to the amendment.

On Question, amendment agreed to.

Lord Hunt of Wirral: moved Amendment No. 207:
	Page 261, line 23, after "appointed" insert "on a winding-up petition presented by a creditor"

Lord Hunt of Wirral: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 208 and 209.
	I understand that Amendments Nos. 208 and 209 will be dealt with by the rules. We discussed the rules in Committee and there was a promise—I well understand why it has not been fulfilled—that I might have a copy of the rules sufficiently in advance to enable me to consult. Unfortunately, it arrived only comparatively recently. The noble Lord, Lord Sharman, and I have done our best to assimilate it. I might need a little longer to consult with those who raised relevant points with me. In those circumstances, I shall not seek at a later stage to press Amendments Nos. 208 and 209.
	The purpose of Amendment No. 207 is to permit secured creditors whose loan is in default to proceed quickly and cheaply to appoint an administrator of their choosing. Where a provisional liquidator has been appointed on a creditor's winding-up petition, it is fair to require that the secured creditor should apply to the court for the appointment of an administrator who will, in effect, replace the provisional liquidator.
	However, it is my contention that it would be wrong in principle to require that where the provisional liquidator is appointed on the company's own petition. It is acutely undesirable that the company should be given a further opportunity to compete with the secured creditor over the choice of the insolvency office-holder. In those circumstances, I beg to move.

Lord McIntosh of Haringey: My Lords, I must confess to the noble Lord, Lord Hunt, that, after I said in Committee that I would do my best to get a copy of the first draft of the rules to noble Lords in good time, I was greeted with a storm of protest by officials. They said, "It's impossible to achieve this. We are nowhere near doing that and there are all sorts of consultations still in process. We cannot do it". To their immense credit, they have succeeded in getting something both to the Opposition Front Benches and to me in time for the debate this afternoon. However, I acknowledge, of course, that that is not in time for the draft to be fully studied and taken account of. If, as a result of studying the draft rules, amendments are tabled at Third Reading, I shall not complain.
	I turn to Amendment No. 207, which is familiar because it has been debated on a number of occasions. I think we are all agreed that the holder of a floating charge should be one of the people who has access to a "quick route" into administration. The Bill achieves that. However, as I said previously—I know that my colleagues in the Commons have said the same thing—where the court has already appointed a provisional liquidator, it is right that only the court can replace that person with an administrator. To allow otherwise would be to usurp the powers of the court. It is not a matter between a creditor and the company; it is a question of the court making the appointment.
	I want to say a word about Amendments Nos. 208 and 209, although the noble Lord, Lord Hunt, has made conciliatory noises about them. Following our discussion in Committee about the "weekend" situation—that is, the problem of court opening hours—I want to acknowledge that it is a real problem. Administration is fundamentally a court-based procedure. Therefore, we do not intend to amend the provision concerning when the administrator's appointment takes effect. However, we do intend that the amended insolvency rules will allow for appointments to be made other than during court opening hours.
	I believe it was the noble Lord, Lord Sharman, who called it the "weekend problem"—that is, the question of what happens when the court adjourns on a Friday afternoon. The noble Lord, Lord Freeman, who I am sorry to see is not in his place today, raised the issue of a kind of fax-back arrangement, whereby something would be faxed to the court and the court's fax would acknowledge it by sending a reply. The Notice of Appointment would be sent to a dedicated central point by fax and the subsequent acknowledgement would show the date and time of receipt—that is, the date and time of appointment. The appointor would then be required to attend at the appropriate court at the first opportunity in order to file the original documents in the relevant court. I pay tribute to the noble Lord, Lord Freeman, for putting forward the suggestion, which forms the basis of the amendments that we shall make to the insolvency rules.
	With my renewed apologies for not getting the draft rules to the Opposition Benches before today, and with my renewed appreciation of officials for their achievement in getting the draft to those Benches, I hope that Amendment No. 207 will not be pursued.

Lord Hunt of Wirral: My Lords, I join the Minister in thanking his officials very warmly for having met today's deadline, and I look forward to the bedtime reading. Undoubtedly, the noble Lord, Lord Sharman, has already assimilated the draft rules because he has an extraordinary expertise. But I am only a mere solicitor, and it may take me a few hours longer to do so. However, we appreciate the way that officials have responded. As I have said in previous debates, they always seem to manage to achieve the most unrealistic targets and objectives, which they are often given by Ministers. I am very grateful to the Minister.
	I am also grateful to him for his words in relation to Amendment No. 207 and for his assurance that, if further amendments prove necessary in the light of further scrutiny of the rules, he will have no objection to that. Of course, we have to move reasonably swiftly because it is anticipated that the next stage of the Bill may be held next week. However, in all those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 208 and 209 not moved.]

Lord Haskel: My Lords, I have to tell your Lordships that, if Amendment No. 210 is agreed to, I cannot call Amendment No. 211 by reason of pre-emption.

Lord McIntosh of Haringey: moved Amendment No. 210:
	Page 271, line 43, leave out from "proposals" to end of line 45.

Lord McIntosh of Haringey: My Lords, this amendment was spoken to with Amendment No. 206. I beg to move.

On Question, amendment agreed to.
	[Amendment No. 211 not moved.]

Lord McIntosh of Haringey: moved Amendments Nos. 212 to 215:
	Page 272, line 3, at end insert—
	"( ) The administrator shall comply with sub-paragraph (4)—
	(a) as soon as is reasonably practicable after the company enters administration, and
	(b) in any event, before the end of the period of eight weeks beginning with the day on which the company enters administration." Page 272, line 4, leave out "have complied" and insert "comply"
	Page 272, line 5, leave out "before the end of the period referred to in that sub-paragraph"
	Page 272, line 26, leave out "not be after the end of the period of six" and insert "be—
	(a) as soon as is reasonably practicable after the company enters administration, and
	(b) in any event, within the period of ten"

Lord McIntosh of Haringey: My Lords, these amendments were spoken to with Amendment No. 206. I beg to move.

On Question, amendments agreed to.
	[Amendment No. 216 not moved.]

Lord Hunt of Wirral: moved Amendment No. 217:
	Page 275, line 11, at end insert—
	:TITLE3:"FINANCING ADMINISTRATIONS
	:TITLE3:Powers of court to approve financing of companies in administration
	57A (1) The administrator of a company may at any time following his appointment apply to the court for approval of super priority financing.
	(2) In this paragraph "super priority financing" means financing for a company in administration provided by a lender who shall enjoy repayment priority over existing secured and unsecured creditors of that company.
	(3) The court shall not make an order granting an application for super priority financing under this paragraph unless it is satisfied that—
	(a) the monies to be borrowed are to be used for expenditure necessary to preserve the company's business for the benefit of the company's creditors; or
	(b) the monies to be borrowed are necessary to continue the operation of the business of the company in order to assist in meeting the administrator's aims under paragraph 3(1)(a); and
	(c) the secured creditors are not prejudiced by the provision of super priority financing; and
	(d) in all the circumstances it is appropriate to make an order in the interests of the administration."

Lord Hunt of Wirral: My Lords, this provision follows a debate that we had in Committee, when I sought to deal with the key issue of super priority finance in company and business rescues. I should tell your Lordships that the Minister, the noble Lord, Lord Sainsbury, explained to me, and no doubt the noble Lord, Lord McIntosh of Haringey, will shortly confirm, that the Government's position is essentially that the decision to lend to a company should be left to the commercial judgment of the lending market, based on whether free assets are available to use as security, among other things.
	However, with the greatest respect, I believe that that approach appears to misunderstand the position that many small and medium-sized companies find themselves in when facing serious problems involving insolvency. Of course, if assets are available to lend against, why would such a company seek administration at that point? The key is to give a company protection from its creditors. That is why we have the moratorium on creditor action. Then, of course, it must have the finance to carry on while a rescue plan is put into place; otherwise, in many cases, the company would not have the funds to carry on and another potentially viable business would be lost.
	I understand that much of the international community still considers our insolvency system within the UK to be essentially a liquidation process. Many small and medium-sized businesses view the system in the same way—that is, as something to be avoided at all costs, often until it is too late.
	I believe we are making great progress with this Bill in reforming the whole structure. But if the new administration process does not allow a business properly to restructure and to be adequately financed while it does so, we risk making no real improvements to the rescue culture and nothing much will change. That is why I make no apology for raising again the issue of financing because I believe that it needs to be considered and properly debated.
	In Committee, the noble Lord, Lord McIntosh of Haringey, noted that the Government would take part in any debate on the issue. I am informed by the noble Lord, Lord Sainsbury, that some debate has taken place during the Recess. The noble Lord, Lord Sainsbury, mentioned to me a meeting with some former members of the review group on the company rescue and business reconstruction review and some United States bankers. I have not had time to speak to all the members of the review group but those members to whom I have spoken were unaware that the meeting had taken place. Following the comments of the noble Lord, Lord McIntosh of Haringey, that he or his officials would be in touch with the review group, several members have been awaiting a telephone call but have heard nothing further. The report took some degree of effort and commitment by those who participated. The group has not met since the report was presented, nor has it been asked to attend any meeting. There is need for further debate and discussion.
	It may help if the noble Lord, Lord McIntosh of Haringey, could let me know who attended that meeting, the views expressed and conclusions reached. It is a vital issue which has to be considered further in order to have the positive effect on the whole rescue business that the Bill admirably seeks to achieve. I beg to move.

Lord McIntosh of Haringey: My Lords, it is a difficult and complex issue. It is true that there are some parallels with practice in the United States; but it is also true that there are differences about which we have to be careful. Yes, we debated the issue in some detail in Committee. There has been correspondence between the noble Lord, Lord Hunt, and the noble Lord, Lord Sainsbury. The noble Lord, Lord Hunt, wrote to me on the matter within the past 10 days or so. I hope that he has received the letter in which I replied to him this morning.
	I go back to the origins of the issue. The noble Lord, Lord Hunt, again referred to them. The report of the joint DTI/Treasury review group, entitled A Review of Company Rescue and Business Reconstruction Mechanisms, was published in November 2000. The review was quoted in Committee. However, as I said then, I have to record the fact that the report did not make any recommendation in relation to "super priority" financing because of the difficulty of the issue and its view that it would be necessary to have courts that were able to take largely commercial decisions to consider applications under such a procedure.
	Having published its report, the work of the review group was completed. I do not know who its members were. The group does not exist at present. But it is true that the Insolvency Service has continued to draw on the expertise of members of the group. The noble Lord, Lord Hunt, raised the issue that former members of the group—I do not know which of them but I shall find out—met with US bankers to consider the issue of "super-priority" funding, but concluded only that this was a complex issue which would need careful consideration. That is, after all, what the review group said two years ago.
	One major reservation on such funding for a company that is in administration is that it would essentially guarantee a return to lenders advancing funds on the basis of such priority irrespective of the commercial viability of the rescue proposals. The decision to finance such companies must be an economic one based on the viability of the company. The review group thought that that was not necessarily within the skills of the courts as presently constituted. It is not the intention of this Government that all companies should be given the chance of rescue irrespective of their viability, but rather that an administrator, on being appointed, should determine whether the company and/or its businesses can be rescued. Therefore—it is the point I made in Committee—whether to finance such a rescue should be a commercial decision, best left to the judgement of the lending market and not the court. The courts have made clear on a number of occasions, and it is generally recognised, that it is not the role of the courts to make judgements on commercial matters. That is for the parties concerned. That has been acknowledged in our discussions on other aspects of the administration process.
	When considering the substance of Amendment No. 217, it difficult to see in the context of UK corporate lending, where lenders take fixed and floating charges usually over all of the property of a company, how the court could satisfy itself in relation to proposed new paragraph 57A(3)(c), where it may not make an order for super priority financing, unless satisfied that,
	"the secured creditors are not prejudiced by the provision of super- priority financing".
	In practice, there may be few occasions where that could be possible.
	The review group's report concluded, and former members of that group found when they subsequently met with US Bankers, that the whole issue of super priority financing is an extremely complex one, with far-reaching potential effect. Legislative changes should be proposed only following extensive consideration and wide consultation. That is not something that should be dealt with in the Bill's progress.
	Having said that, of course, I shall give the noble Lord, Lord Hunt, the information he seeks about who took part—unless they wish me not to give that information, although I cannot imagine that. I shall continue to keep the need for insolvency reform under review. As part of that process we are happy to consider any comments. I have said in a letter sent this morning to the noble Lord, Lord Hunt—I am sorry to learn that he has not received it—that we continue to be concerned about the issue and willing to discuss it with him. With reference to his kind offer to host a dinner, it would probably be more appropriate for us to do so, if there were to be such an occasion.

Lord Hunt of Wirral: My Lords, I am a little overwhelmed. I have never before been offered a free dinner by a Government Minister. Perhaps I may consult a little. I am grateful to the noble Lord. The Minister is noted for his courtesy. He has exceeded even his own expectations as well as mine.
	On super financing, there are a number of occasions where important businesses of immense size, with huge implications for jobs and the UK economy, at present seek to reconstruct against a backdrop which gives them no protection from creditors. An unreasonable, and often small, creditor can bring the edifice crumbling down because under our present law there is no protection.
	The Minister has stated how complicated and difficult the issue is to resolve. Against that background, I welcome his words and shall reflect on them. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Haskel: My Lords, I have to inform the House that Amendments Nos. 218 and 219 have been marshalled incorrectly. I propose to call Amendment No. 219 and then Amendment No. 218.

Lord McIntosh of Haringey: moved Amendment No. 219:
	Page 275, line 42, leave out paragraphs 64 to 66 and insert—
	"64 (1) The administrator of a company may make a distribution to a creditor of the company.
	(2) Section 175 shall apply in relation to a distribution under this paragraph as it applies in relation to a winding up.
	(3) A payment may not be made by way of distribution under this paragraph to a creditor of the company who is neither secured nor preferential unless the court gives permission.
	65 The administrator of a company may make a payment otherwise than in accordance with paragraph 64 or paragraph 13 of Schedule 1 if he thinks it likely to assist achievement of the purpose of administration."

Lord McIntosh of Haringey: My Lords, Amendments Nos. 218 and 219 cover the same subject. As I explained in Committee, the drafting of the provisions allowing an administrator to make payments to creditors did not work as we had wanted. Amendment No. 219 makes clear the type of payments that must be made in accordance with the standard order of priority set out in Section 175 of the Insolvency Act 1986. In addition, it clarifies the distinction between payments and distributions.
	First, the provision will allow an administrator to make distributions to creditors as a body, in accordance with the standard order of priority. A distribution to unsecured creditors will require the permission of the court. In order to distinguish between such payments and those, usually one-off payments, that are made to individual creditors, outside of the order of priority, we have referred to the first category of payments as distributions.
	Secondly, the administrator will continue to be able to make payments, by virtue of paragraph 13 of Schedule 1 to the Insolvency Act 1986, to one or more creditors in respect of debts that were owed at the date of administration as well as expenses and liabilities that arise during the course of the administration, where such payments are necessary or incidental to the performance of his duties.
	Thirdly, the amendment will allow the administrator to make payments that he believes are likely to assist the achievement of the purpose of administration. That will involve the administrator using his commercial judgment. Examples of such a situation could be payment of outstanding debts to the supplier of equipment that requires regular safety inspections and maintenance or payment to the franchisor of a franchise business to enable necessary goods to be supplied. Payments such as those would need to be made out of the standard order of priority and to a specific creditor or creditors, rather than by way of distribution to creditors generally.
	That is an important point and is not provided for in the opposition Amendment No. 218. With that one exception, we believe that the issues in Amendment No. 218 are covered in Schedule 16, as amended by Amendment No. 219. I beg to move.

Lord Kingsland: My Lords, I am curious to know why these amendments have been marshalled incorrectly. I would like to have had the opportunity to open the batting and to invite the Minister to tell me how government thinking had developed since the probing way in which I introduced this matter in Committee. From what the Minister has said, I believe that I can infer that government thinking has moved on; indeed; it has moved so far that not only have all the issues raised by us in Committee been dealt with, but an additional imaginative insertion has been made. In those circumstances I thank the Minister for dealing with the matter in the way that he has. I shall withdraw my amendment.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Kingsland, is excessively kind and it falls to me to thank him for the way in which he raised the matter in Committee and enabled us to respond as we have.

On Question, amendment agreed to.
	[Amendment No. 218 not moved.]

Lord Hunt of Wirral: moved Amendment No. 220:
	Page 277, line 27, at end insert—
	"( ) Where the goods are used by the administrator to continue running the business, the administrator must make payments to the owner of the goods under the terms of the hire-purchase agreement."
	I All England Reports 476. On the face of the Bill that will bring clarity to administrators and lenders.
	Amendment No. 221 would insert the words:
	"to include any additional value attributable to the owner's ability to rehire the goods".
	The market value of the equipment will not in all cases compensate the lender for the goods on hire. The rehire value is often worth more than the market value and, where the equipment is still within its life expectancy, the lender will seek to rehire to capitalise on his investment. The court should be able to use its discretion in such cases. I hope that the Minister will feel able to accept Amendments Nos. 220 and 221. I beg to move.

Lord McIntosh of Haringey: My Lords, I am sorry to say to the noble Lord, Lord Hunt, that I am no more sympathetic to these amendments than I was when my noble friend Lord Mitchell moved them in Committee. I understand the concerns of the Finance and Leasing Association. We have considered carefully the views expressed to us, but as I explained in Committee, the Government do not want to amend the current legislation. Clearly, where assets that are subject to such an agreement continue to be used during the administration, the hire purchase companies would suffer a loss through lack of payment during that period. But the purpose of administration is to provide a breathing space in which to put forward rescue proposals or proposals for improving the outcome for creditors. It would not be right to allow such proposals to fail as a result of a legal requirement to continue making payments of this kind throughout such a breathing space, as suggested by Amendment No. 220.
	The Bill as drafted does not make a change in the existing law. It replicates existing provisions whereby it falls to the courts to resolve the difficult act of balancing the interests of the hire purchase creditor, and their need for continued payments, and the interests of the general body of creditors which requires that the breathing space is sufficient for workable proposals to be developed and implemented.
	We believe that existing case law on the ability of creditors to enforce their rights during the moratorium will continue to be fully relevant to the hire purchase provision in the revised administration procedure. It remains the Government's view that the courts are best placed to resolve such matters on a case-by-case basis, taking full and proper account of the facts of each case.
	Amendment No. 221 would require additional money to be paid to the owner of hire purchase goods, over and above their market value in order to account for the owner's ability, or not, to rehire the goods; that is, to pay the owner in excess of the market value of the goods to enable him or her to replace them. However, if the owner believes that some additional value attaches to the goods as a result of their capacity to be hired, it is up to that creditor to persuade the court that such an additional sum should be included in its estimation of the market value. But surely as a matter of principle all that an owner can really expect must be the market value of the goods, thus allowing the owner to replace the goods and thereafter to hire them out. I am sorry to be so negative.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister for his comments on Amendment No. 220, although I regret his refusal to understand the point raised in Amendment No. 221. In the circumstances, I accept what he has said. I shall consider the matter further, but in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 221 not moved.]

Lord Hunt of Wirral: moved Amendment No. 222:
	Page 278, line 22, leave out "harm" and insert "prejudice"

Lord Hunt of Wirral: My Lords, currently the Bill provides that a creditor can apply to the court for relief if he thinks that the administrator has acted in such a way as unfairly to harm his interests. I contend that "harm" is a wide term and there is little or no jurisprudence on it. It is not a word that, in this context, has been considered judicially.
	I am advised by lawyers who consider these matters in everyday terms that "harm" will cause confusion as to its scope. During the course of administration, many creditors could say that they are harmed by the action of an administrator. It is therefore far too wide a term. The scope of "prejudice" is less wide and, in its favour, it is commonly used—for example, in Section 459 of the Companies Act 1989, so has a body of judicial opinion already around it. The same change should be made to government Amendment No. 205, where the word "harm" also occurs. I beg to move.

Lord McIntosh of Haringey: My Lords, this is a case where the non-lawyers have to stand up for their rights. The Lord Chancellor is trying to update legal language. I found myself repeating a latin phrase because somebody else had used it. The noble Lord, Lord Hunt, did so earlier without any such justification. We are trying to get this stuff out of legal language. For the purposes of Pepper v. Hart, I am advised that there is no distinction between "harm" and "prejudice"—but "harm" is a common word and more understandable to lawyers. In the cause of updating the language of law, I will resist Amendments Nos. 222 and 223.
	The noble Lord did not speak to Amendment No. 225 but I will say a word, in the hope that he will not move it. Its purpose is to prevent successful actions being taken against the administrator where he has acted reasonably in all the circumstances. There is no real prospect of a successful challenge to the actions or inactions of an administrator where he or she has acted reasonably in all the circumstances. Proposed paragraph 74 in Schedule 16, which provides the right to challenge the administrator where unfair harm is alleged is based squarely on Section 27 of the Insolvency Act 1986. There is no such proviso in that section. We would not expect the courts to act significantly differently in relation to paragraph 74 than in the past in relation to Section 27—though no doubt case law will develop in light of the revised administration procedures.

Lord Hunt of Wirral: My Lords, I was awaiting the Minister's response to Amendments Nos. 222 and 223 before speaking to Amendment No. 225. I am not sure whether the Minister has yet made his will, but I will caution the noble Lord and give him some free legal advice. He should not try to remove the jargon because huge areas of jurisprudence govern the words that his will may use. If he uses everyday language, he will find that when the sad event arrives and he departs for the next world, all his goods will go in precisely the opposite direction to that which he might intend.

Lord McIntosh of Haringey: My Lords, I shall not be there.

Lord Hunt of Wirral: Yes, my Lords, but the noble Lord might like the assurance that his wishes would be fulfilled. Although the Minister may excite for a moment approval from the House by saying that he much wants to use everyday language, I caution him that where words have already been subjected to lengthy legal debate, it is often wiser to stick with the established words. But of course the Minister's brave attempt to justify the unjustifiable—which I remember doing on many occasions when I was in the noble Lord's position—gives me cause to think and ponder.
	As to Amendment No. 225, the Minister is saying "Do not concern yourself. Those words will be implied. There is no need to include them expressly because the court will only act in circumstances where it is satisfied that the administrator has acted reasonably". In those circumstances, I accept the Minister's assurance. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 223 not moved.]

Lord McIntosh of Haringey: moved Amendment No. 224:
	Page 278, line 27, at end insert—
	"( ) A creditor or member of a company in administration may apply to the court claiming that the administrator is not performing his functions as quickly or as efficiently as is reasonably practicable."
	On Question, amendment agreed to.
	[Amendment No. 225 not moved.]

Lord McIntosh of Haringey: moved Amendment No. 226:
	Page 278, line 41, leave out "under this paragraph" and insert "on a claim under sub-paragraph (1)"
	On Question, amendment agreed to.
	[Amendment No. 227 not moved.]
	[Amendment No. 228 had been withdrawn from the Marshalled List.]

Lord Hunt of Wirral: moved Amendment No. 229:
	Page 279, line 41, leave out "three months" and insert "one year"

Lord Hunt of Wirral: My Lords, I am in the wonderful position that the noble Lord, Lord Sainsbury of Turville, has added his name to this amendment. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendment No. 230:
	Page 280, line 2, leave out "three" and insert "six"
	On Question, amendment agreed to.
	[Amendment No. 231 not moved.]

Lord Kingsland: moved Amendment No. 232:
	Page 280, line 13, leave out sub-paragraph (a) and insert—
	"(a) a majority in value of the secured creditors."

Lord Kingsland: My Lords, I shall speak also to Amendments Nos. 233 to 237 and to Amendments Nos. 251 to 253—which were first tabled in Committee. They dispense with the need to obtain the consent of every secured creditor, recognising that companies increasingly borrow from a wide variety of secured creditors; and that, as a result, it may not be timely or practical to obtain the consent of every one.
	The amendments either provide for a simple majority or a 75 per cent majority. The latter figure is adopted because it represents the commonly used figure internationally for the approval of "cram downs" in insolvencies.
	I know that the Government are concerned that the amendments might have the effect of disenfranchising smaller secured creditors; but we consider that, for the reasons mentioned, it is impractical to require the consent of every single one. If the concern is about larger secured creditors, the preferred amendment should be for a 75 per cent majority.
	So far as Amendment No. 253 is concerned, paragraph 98 provides that an administrator is discharged from liability in respect of any action in his capacity as an administrator once he has ceased to be the administrator of the company. In the case of an administrator appointed by the holder of a floating charge, the company, or its directors, his discharge takes effect at the time appointed by a resolution of the creditors' committee; or, if there is no committee, by resolution of the creditors.
	Paragraph 98(3) provides that such a resolution shall be taken as passed if passed with the approval of each secured creditor of the company and a majority of the preferential creditors in value if the administrator has made a statement, in his statements of proposal, that he thinks the company has insufficient property to enable a distribution to be made to unsecured creditors. In those circumstances the unsecured creditors are disenfranchised.
	That must be wrong as regards the time at which the administrator is discharged from liability in respect of any action of his as administrator. It may be his fault that there will be no distribution to unsecured creditors. The date on which he is discharged from liability is a decision that concerns them. They should be entitled to have a say; and to insist on some explanation as to why a dividend will not be paid to them before they decide on the date that his discharge will take place. I beg to move.

Lord McIntosh of Haringey: My Lords, the period of an administration can be extended by the consent of the creditors instead of requiring the administrator to apply to a court. The time limits for sending out the statement of proposals, for the period of notice for a creditors' meeting and for the holding of the initial creditors' meeting can also be extended by consent. Currently, consent is defined as being the majority of those unsecured creditors who respond, plus all the secured creditors. Amendments Nos. 232, 235, 237 and 252 allow for consent to be considered as the majority of the secured creditors rather than all of them, whereas Amendments Nos. 233, 234, 236 and 251 seek to define consent as referring to a 75 per cent majority of secured creditors.
	If I understand correctly the noble Lord, Lord Kingsland, he prefers the 75 per cent option to the majority option. But we think that the decision to extend the period of an administration and the moratorium on legal and other actions that go with it, should be one that is taken following consent of all of the secured creditors.
	There may be times when it is difficult or even impossible to obtain consent of each of the secured creditors. But the administrator will, in that or any event, be able to apply to the court for an extension to the administration as an alternative. That has always been the case. It would then be up to the court to weigh up the potential benefits of the extension against the interests of creditors, including the secured creditors.
	Although it is a tempting idea to provide for a bare majority or 75 per cent majority of secured creditors for the purposes of consent, we do not think it would be practical. First, the administrator always has the option to go to court for an extension for a specified period. Secondly, and more importantly, in reality the administrator must elicit the support of the secured creditors—perhaps as funders of the administration, but certainly to avoid them enforcing their security immediately at the end of an administration moratorium thus probably destroying the possibility of a rescue.
	On the other hand, paradoxically, Amendment No. 253 seeks to broaden the extent to which the consent of creditors is required by including those unsecured creditors who are not going to receive any distribution from the administration, and therefore have no financial interest in it.
	While I believe that it is right and proper to include all creditors in those decisions in which they have a financial stake, in those cases where this is not the case, this would simply add unnecessary administrative burdens and costs to the administration; costs that could reduce the returns for those creditors who do have a financial interest. In summary, I am opposed to relaxing the rules in all these amendments.

Lord Kingsland: My Lords, I thank the Minister for his full response. So far as concerns the question of the majority or the 75 per cent, I shall go away and reflect on whether it would be sensible to return again with a similar amendment at Third Reading. I shall also reflect on what he says about the position of an unsecured creditor. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 233 to 237 not moved.]

Lord McIntosh of Haringey: moved Amendment No. 238:
	Page 282, line 32, at end insert "and"

Lord McIntosh of Haringey: My Lords, in moving Amendment No. 238, I shall speak also to Amendment No. 244. The potential for a company to move directly into a creditors' voluntary liquidation from administration is new and is introduced by paragraph 83 of new Schedule B1—that is, Schedule 16 of the Bill. This will facilitate, for example, distributions to unsecured creditors.
	These amendments are simply consequential on that new procedure. We have provided that certain requirements necessary where a company goes directly into voluntary liquidation will not be necessary or appropriate where a company moves from administration into creditors' voluntary liquidation. These matters include the requirement to publish a notice of the resolution to wind up, to hold a meeting of creditors, to lay a statement of affairs before the creditors and to appoint a liquidator. This latter requirement is addressed specifically by paragraph 83. The others will have already been undertaken as part of the administration process. There is no value in repeating them simply for the purposes of the creditors' voluntary liquidation.
	In addition, the possibility of a declaration of solvency has no place in this procedure. Where a creditors' committee has already been formed in administration it will continue to exist as if it were a liquidation committee. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendment No. 239:
	Page 282, line 41, leave out "file with" and insert "send to"

Lord McIntosh of Haringey: My Lords, in moving Amendment No. 239 I shall speak also to Amendments Nos. 240 to 243 and Amendments Nos. 245 to 250. These are technical amendments. They make reference to documents being filed with the Registrar of Companies; references to documents being sent to him and thereafter registered by the Registrar.
	The Bill includes various references to the administrator filing documents with the Registrar of Companies, but in technical terms this merely means the document arriving in whatever state it may be in at Companies House. In other words, Companies House considers that it has been filed when it arrives in the post room. In most instances in the Bill this is acceptable since nothing substantive flows from the filing. However, there are two occasions on which an action or change in circumstance is instigated on a document being accepted by the Registrar of Companies. It then becomes particularly important that the terminology used in the Bill is precise, to mean that the substantive effect is from when the document is put on the register, not merely when it has arrived at Companies House.
	The two occasions are those dealt with in the two paragraphs affected by these amendments, which deal with the end of the administration, when the company is either to move into creditors' voluntary liquidation, in order that the administrator can make distributions to creditors, or, in those cases where there is nothing left to distribute, is to be dissolved.
	The Bill as drafted allows for the move into liquidation or dissolution to take effect on, or at a point some time after, the filing of the appropriate document with the Registrar of Companies. However, for the reason that I have given regarding the registrar's definition of "filing", the filing of an incorrectly filled-in form is not the "filing" that we would want to trigger the change in the company's circumstances. We want the change to be effected when the document is accepted and placed on the company's public file—that is, from the date that it is registered with the Registrar of Companies. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendments Nos. 240 to 250:
	Page 282, line 42, at end insert—
	"( ) On receipt of a notice under sub-paragraph (3) the registrar shall register it." Page 282, line 43, leave out "files" and insert "sends"
	Page 283, line 3, leave out "filing" and insert "registration"
	Page 283, line 8, leave out "filed" and insert "registered"
	Page 283, line 12, at end insert—
	"( ) In the application of Part IV to a winding up by virtue of this paragraph—
	(a) section 85 shall not apply,
	(b) section 86 shall apply as if the reference to the time of the passing of the resolution for voluntary winding up were a reference to the beginning of the date of registration of the notice under sub-paragraph (3),
	(c) section 89 does not apply,
	(d) sections 98, 99 and 100 shall not apply,
	(e) section 129 shall apply as if the reference to the time of the passing of the resolution for voluntary winding up were a reference to the beginning of the date of registration of the notice under sub-paragraph (3), and
	(f) any creditors' committee which is in existence immediately before the company ceases to be in administration shall continue in existence after that time as if appointed as a liquidation committee under section 101." Page 283, line 15, leave out "file" and insert "send"
	Page 283, line 16, leave out "with" and insert "to"
	Page 283, line 18, at end insert—
	"( ) On receipt of a notice under sub-paragraph (1) the registrar shall register it." Page 283, line 19, leave out "filing" and insert "registration"
	Page 283, line 21, leave out "files" and insert "sends"
	Page 283, line 26, leave out "filing" and insert "registration"
	On Question, amendments agreed to.
	[Amendments Nos. 251 to 253 not moved.]
	Schedule 17 [Administration: minor and consequential amendments]:

Lord McIntosh of Haringey: moved Amendment No. 254:
	Page 298, line 35, leave out "of the approval of the voluntary arrangement" and insert "on which the voluntary arrangement takes effect"

Lord McIntosh of Haringey: The amendment and those grouped with it—Amendments Nos. 255 to 259—are consequential and technical amendments necessary to align the Bill with the Insolvency Act 2000 and facilitate the drafting of the insolvency rules. Amendments Nos. 254 and 255 reflect the fact that Section 387 of the Insolvency Act 1986 has already been amended by the Insolvency Act 2000 and add further necessary consequential amendment to subsection (3). Amendments Nos. 256, 257 and 258 will ensure that we have sufficient vires to provide appropriate rules for the Bill's provisions. Amendment No. 259 corrects a cross-reference in Schedule 17(9). I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendments Nos. 255 to 259:
	Page 298, line 38, after "paragraphs" insert "(a),"
	Page 300, line 7, at end insert—
	"( ) At the end of paragraph 2 (which becomes sub-paragraph (1)) add—
	"(2) Rules made by virtue of this paragraph about the consequence of failure to comply with practice or procedure may, in particular, include provision about the termination of administration."" Page 300, line 10, at end insert—
	"(2A) After paragraph 14 insert—
	"14A. Provision about the application of section 176A of this Act which may include, in particular—
	(a) provision enabling a receiver to institute winding up proceedings;
	(b) provision requiring a receiver to institute winding up proceedings."" Page 300, line 10, at end insert—
	"(2B) After paragraph 14A (inserted by sub-paragraph (2A) above) insert—
	"Administration
	14A. Provision which—
	(a) applies in relation to administration, with or without modifications, a provision of Parts IV to VII of this Act, or
	(b) serves a purpose in relation to administration similar to a purpose that may be served by the rules in relation to winding up by virtue of a provision of this Schedule."" Page 300, line 23, leave out "28(4)" and insert "28(7)"
	On Question, amendments agreed to.
	Schedule 18 [Schedule 2A to Insolvency Act 1986]:

Lord Hunt of Wirral: moved Amendment No. 260:
	Page 308, line 1, leave out from "involves" to end of line 3 and insert "the grant of a security interest by a party to the arrangement to—
	(i) a person holding it as trustee for one or more persons who hold a capital market investment issued by a party to the arrangement;
	(ii) a person party to such arrangements who issues a capital market investment;
	(iii) a person holding it as trustee for a person party to such arrangement who issues a capital market investment; or
	(iv) a person holding it as trustee for one or more persons who are party to the arrangement and who provide finance to a person party to such arrangement; or"

Lord Hunt of Wirral: My Lords, we have already debated the amendment in Committee. I am aware that the Government believe it to be unnecessary, but I have consulted widely outside the House, in particular, with those in the legal profession who specialise in the area and who are not as satisfied as the Government appear to be.
	The purely technical nature of the amendment is evident; I ask the Government only to reconsider. Perhaps I may explain. The existing capital markets exemption provided for in Schedule 18 demonstrates that the Government have decided that such transactions should be exempt from the restriction on appointing an administrative receiver to support the structured finance market.
	I am not aware of any policy issues connected with the exception as it applies to special purpose vehicles used in structured finance transactions. Several structures should fall within the exemption but, as drafted, the Bill covers only one of them. It would be unfortunate if the Bill provided for some types of finance techniques dealing with special purpose vehicles but not others for what appears to be no sound policy or political reason. I therefore make no apology for again moving this purely technical amendment designed to cover all the types of structure that the Government have agreed should be exempt.
	Finally, I am happy to share with the Minister and his colleagues the legal advice that I have received, which makes it imperative that the amendment is accepted. Meanwhile, I beg to move.

Lord McIntosh of Haringey: My Lords, let me immediately say in response to the noble Lord's final point that officials have already met the London Law Society. If, following today's consideration, the society wants a further meeting, I am sure that that may be arranged. If the noble Lord, Lord Hunt, is referring to some other adviser, we would include him in that meeting or make separate arrangements.
	First, let me say what is a capital market arrangement. It is defined in Clause 72B(1) and paragraph 1 of the schedule. It is an arrangement that involves the issue of a capital market investment; that involves, or is expected to involve, a debt by at least one party of at least £50 million; and that involves security being granted to a person holding it on trust for someone who holds a capital market investment issued by a party to the arrangement.
	There seems to be a fear that the definition of a capital market arrangement contained within paragraph 1(1)(a) of Schedule 2A will be insufficiently wide to encompass all potential capital market arrangements. That is true, but it has never been our intention that that subparagraph should cover all such arrangements; that is why we have subparagraphs (b), (c) and (d). The exception provisions provided by paragraph 1 of the Schedule are for all sorts of structures within the capital markets. It must be possible to ensure that an arrangement falls within those provisions.
	Indeed, officials have spent much time considering and drafting the exceptions with various interested parties—including City lawyers—and are completely satisfied that, while the exceptions are not so broad so as to encourage avoidance, they will in practice prove to be flexible. The matter would also presumably impact on the eligibility criteria for the new company voluntary arrangement procedure introduced by the Insolvency Act 2000, which was amended specifically to deal with capital market arrangements by an instrument approved by this House on 24th July—without comment of which I am aware.
	The proposals in the Bill and the eligibility criteria for the new company voluntary arrangement impact on similar capital market arrangements. It makes sense to have comparable definitions. Indeed, to adopt different definitions would create the potential for confusion and uncertainty and call into question the instrument accepted by Parliament only three months ago. I must resist the amendment.

Lord Hunt of Wirral: My Lords, the Minister resists the amendment with such good grace and such a kind offer to allow those who advise to consult further with him and his colleagues that in the circumstances, I have no alternative but to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 247 [Unsecured creditors]:

Lord McIntosh of Haringey: moved Amendment No. 261:
	Page 179, line 28, at end insert—
	"( ) Subsection (2) shall also not apply to a company if—
	(a) the liquidator, administrator or receiver applies to the court for an order under this subsection on the ground that the cost of making a distribution to unsecured creditors would be disproportionate to the benefits, and
	(b) the court orders that subsection (2) shall not apply."

Lord McIntosh of Haringey: My Lords, in moving the amendment I shall speak also to Amendments Nos. 262 to 263. In dealing with Amendment No. 261, I thank the Opposition for giving us the opportunity to reconsider since Committee whether an office-holder—a liquidator, administrator or receiver—should be free not to implement the ring fence where, although the net property is equal to or more than the prescribed minimum, he nevertheless thinks that the cost of distribution will outweigh the benefit. We are thinking of here a company that may have a large number of unsecured creditors. As someone who has an ITV Digital box, I probably fall into that category. Seriously, where the office-holder is of the view that—because of the sheer numbers of unsecured creditors, for example—the costs of distributing the prescribed part would really not justify that distribution, he should be able to act to disapply the new section.
	On further consideration of the issue over the summer, we have reached the conclusion that new Section 176A would benefit from an express provision to allow the office-holder to apply to court to disapply the obligation to set aside the prescribed part where such a situation arises. The amendment will do this where the court is satisfied that the costs of distribution would outweigh the benefits.
	We are grateful to the City of London Law Society for bringing the need for Amendments Nos. 262 and 263 to our attention. Our policy has always been that the calculation of the prescribed part is not to apply to charges created before the section's commencement—and that is consistent with the provision that the holder of an existing floating charge will continue to be able to appoint an administrative receiver—but that it is to apply to any floating charge created after the section's commencement.
	The easiest way to explain that is to give an example. Where a company has granted both pre- and post-commencement floating charges, the liquidator, say, would pay out to fixed security holders; then pay the expenses of the winding-up; then pay any remaining preferential claims; then pay out to the pre-commencement floating charge holder, or holders; and then he would apply the prescribed part to the net property available to the post-commencement floating charge holders.
	We do not anticipate a problem with pre-commencement charges that have subordinated their claim to a post-commencement charge. They will have done so in the knowledge that they will be waiving their right not to be subject to the new Section 176A. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendments Nos. 262 and 263.
	Page 179, line 44, after "creation" insert "and which is created after the first order under subsection (2)(a) comes into force"
	Page 180, line 2, leave out subsections (9) and (10) and insert—
	"(9) An order under this section may include transitional or incidental provision."
	On Question, amendments agreed to.
	Clause 248 [Liquidator's powers]:

Lord Kingsland: moved Amendment No. 264:
	Page 180, leave out lines 10 to 14 and insert—
	"The following shall be inserted in Part II of Schedule 4 to the Insolvency Act 1986 (c. 45) (liquidator's powers in winding up: powers exercisable without sanction in voluntary winding up, with sanction in winding up by the court) after paragraph 4—
	"4A. Power to bring legal proceedings under section 213, 214, 238, 239 or 423.""

Lord Kingsland: My Lords, in a liquidation certain powers are only exercisable with the sanction of the court, the sanction of the liquidation committee or the company's creditors. For example, a liquidator can make a compromise with creditors only with sanction. In contrast, a liquidator can raise money on the security of assets of the company without sanction. Some powers are exercisable with sanction in a compulsory liquidation, but without sanction in a voluntary liquidation.
	One such power is to bring or defend any action or other legal proceeding in the name, and on behalf of, the company. In a compulsory liquidation the liquidator must seek sanction for doing so. By contrast, in a voluntary liquidation there is no need for him to do so. He can take proceedings in the name and on behalf of the company, without seeking the sanction of the court or, indeed, anyone else.
	Clause 249 provides that the legal proceedings under Sections 213, 214, 238, 239 and 423, which are proceedings in the name of the liquidator but for the benefit of the company in liquidation, can be exercisable only with sanction both in a compulsory and a voluntary liquidation, despite that in a voluntary liquidation the liquidator can bring proceedings in the name and on behalf of the company without sanction. We can see no reason why proceedings under Section 213, 214, 238, 239 or 423 should be treated differently from proceedings in the name and on behalf of the company.
	If it is right that a liquidator can take legal proceedings in the name and on behalf of the company without sanction in a voluntary liquidation, we believe it must be right that he can take proceedings under the above-mentioned sections in his own name without sanction as well. All such proceedings should be treated in the same way. I beg to move.

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Kingsland, has moved that amendment without one reference to the Lewis case, which I thought was going to be the central point. However, as currently drafted Clause 248 will mean that the liquidator of a company will need to seek the sanction of the court or the liquidation committee, or a meeting of creditors where there is no committee, before taking any civil recovery action. That will be the same whether the company is in compulsory or voluntary liquidation. The amendment seeks to remove the need for sanction if the company is in voluntary liquidation. We do not believe that is appropriate.
	Perhaps I may remind the House of the reasons behind that provision. Until a recently decided case—the Lewis case, otherwise known as Floor Fourteen—the power in Paragraph 4 of Part 2 to Schedule 4—that is the power to bring or defend any action or other legal proceeding in the name and on behalf of the company—was thought to include the power to bring civil recovery actions. Therefore, it was presumed that the liquidator in a compulsory liquidation would require sanction to bring such actions, while a liquidator in a voluntary liquidation would not.
	However, it was clear from the judgment in that case that civil recovery actions are not actions in the name of, or on behalf of, the company. Therefore, it became apparent that no liquidator would require the sanction of creditors to take such action. That has led us to review the whole process of making civil recoveries and the issue of whether a liquidator—whether in a compulsory or voluntary case—ought to require sanction from creditors in order to take such action.
	Consideration of that matter led us to look at the impact of the removal of the Crown's preference, whose abolition is aimed at generating funds for unsecured creditors. We would not want any such sums to be used by the liquidator in pursuing legal action unless the creditors approve. After all, it is a commercial decision for the creditors to choose between, say, a five pence in the pound dividend payable now, or whether to allow the liquidator to pursue a claim which may result in a 50 pence in the pound dividend at a later stage.
	That is why we have put in the new power for the liquidator in Part 1 of Schedule 4 to the Act, which covers powers exercisable with sanction in both voluntary and compulsory liquidation.

Lord Kingsland: My Lords, perhaps the noble Lord can tell me whether he accepts my amendment or whether he rejects it.

Lord McIntosh of Haringey: My Lords, I thought I was making it clear that we need the change which is provided for in the Bill and that the amendment would damage that. We cannot accept it.

Lord Kingsland: My Lords, I shall not bring the amendment back at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey: moved Amendment No. 265:
	Page 180, line 13, after "239" insert ", 242, 243"

Lord McIntosh of Haringey: My Lords, in moving Amendment No. 265, I shall speak also to Amendments Nos. 344 and 345. Those amendments are consequential on previous amendments. They will ensure that appropriate insolvency provisions extend to Scotland in addition to England and Wales. I beg to move.

On Question, amendment agreed to.
	Clause 251 [Duration of bankruptcy]:

Lord Hunt of Wirral: moved Amendment No. 266:
	Page 181, leave out lines 25 to 28.

Lord Hunt of Wirral: My Lords, as the Minister is aware, I was concerned as we were debating the Bill in Committee about the effect of the automatic right to discharge and release on or within 12 months, as compared to the existing position where that occurs after three years. I therefore move Amendment No. 266 on page 181, which proposes a substitution for Section 279 of the Insolvency Act 1986. It would leave out subsection (2), which reads:
	"If before the end of that period the official receiver files with the court a notice stating that investigation of the conduct and affairs of the bankrupt under section 289 is unnecessary or concluded, the bankrupt is discharged when the notice is filed".
	In Amendments Nos. 267 and 269, I seek to insert the words on the Marshalled List.
	I want to raise with the Minister the early automatic right to discharge and release. As I understand the position under the Bill, the period would be 12 months, unless a notice were filed by the official receiver under the clause to discharge the bankrupt at an earlier date. I also understand that during consultations it was stated by one of the Minister's officials that this could well result in someone filing for bankruptcy and eight weeks later being discharged.
	Many people outside this House are most concerned about such a major change in the bankruptcy law. Under these proposals, I and my colleagues are seeking to allow for the bankruptcy discharge period being for a fixed period of 12 months without the possibility of reduction. I would argue that for the following reasons. Reducing the period to less than 12 months is likely to act as a significant incentive to debtors to enter bankruptcy, after which the debtor can acquire new assets free of any claim from his creditors.
	Secondly, by definition, a bankrupt is unable to pay his liabilities and so his assets are likely to be minimal—or certainly exceeded—by the amount he owes to creditors. Being divested of existing assets is therefore not a significant disincentive to becoming bankrupt for the "culpable" bankrupt.
	Thirdly, Clause 251 as drafted would substantially reduce the trustee's power to ensure co-operation from the debtor since once a notice under the clause has been issued it would remove the power to suspend discharge for failure to co-operate. That is a most important consideration.
	Fourthly, under the clause as drafted, there is little time in practice to come to any conclusion about culpability, prior to filing a notice to discharge, as the official receiver is likely to make a decision quickly after a first interview with the bankrupt. A trustee in bankruptcy may subsequently discover matters relevant to the conduct of the bankrupt. In those circumstances, there is no opportunity to make an application for a bankruptcy restriction order because the bankrupt would have received his discharge.
	As drafted, there is no provision for any co-operation between the official receiver and the trustee on the filing of a notice under this clause, even though the trustee is likely to hold information relevant to the decision-making process; for instance, inappropriate conduct and failure to co-operate. I hope that the Minister will carefully consider the situation in the light of evidence which is slowly emerging.
	I am not sure whether officials have fully briefed the Minister on the latest report from the Centre for Economics and Business Research. I am pleased to see that they have. The consultancy is warning that personal bankruptcies could rise by more than 50 per cent if the Government's proposals are not defeated in this House tonight. Measures in the Enterprise Bill which are designed to allow these so-called pain-free bankruptcies that do not punish individuals for taking risks with their credit could backfire.
	The report sets out to say that instead of boosting the economy it is estimated that personal bankruptcies will increase by more than 13,000 a year, knocking £180 million off the gross domestic product. It claims that the resulting £76 million annual cost to unsecured lenders could lead to 170,000 people being excluded from the credit market. I have been made aware of the situation in the United States where there are what are called US-style serial bankrupts who exploit lenders. I am also aware that the report has caused Martin Hall, Director-General of the Finance and Leasing Association, to say that the Government were going too far in exposing the bankruptcy system to abuse.

Lord Patten: My Lords, I am grateful to my noble friend for giving way. I listened with great care to the forensic presentation of his case, which is devastating whatever the outcome. Will he agree that respect for law passed in this place and another place is paramount? Will he further agree that a law passed by this place and another place which allowed American serial bankrupts or people in this country to go through a revolving door of bankruptcy every eight weeks by setting up a business and moving on will rapidly be brought into disrepute? I am sure the Minister would not want that?

Lord Hunt of Wirral: My Lords, I am grateful to my noble friend Lord Patten. I agree that disturbing statistics and conclusions are revealed by an independent research consultancy. We would do well to recall the experience in the United States. The concern from these Benches is that if one creates a US-style situation, in many circumstances those who find difficulty now in borrowing but succeed will find themselves excluded from such credit being made available.
	The noble Lord, Lord Sharman, may make the point that, as was said by his noble friend Lord Razzall, it is important to get the balance right between allowing people to start again quickly and preventing the consumer credit industry from serious damage. My noble friend Lord Patten rightly drew attention to the importance of these provisions. My noble and learned friend Lord Howe of Aberavon has also expressed concern, as have many noble Lords from all sides of the House. It is therefore a matter of getting the balance right.
	The most fundamental point I seek to make is the difficulty this House faces in getting the balance right because the Bill does not distinguish business bankrupts from consumer bankrupts. I have every sympathy with the Minister in wishing to make things possible for those who started up businesses through their own entrepreneurship but who through no fault of their own now face difficulties. Those business bankrupts, those business entrepreneurs, are in a completely different category. We should want to see measures introduced that would reduce the bankruptcy discharge period for entrepreneurs of that kind. However, it has been shown in other countries that, where the bankruptcy discharge period is reduced, the number of consumer bankrupts increases considerably.
	The Minister looked quizzically at me when I sought to differentiate between consumer bankrupts and business bankrupts. That is exactly what the law does in the United States. For example, in America, over 97 per cent of the 1.5 million bankruptcies in 2001 were consumer bankruptcies. In Hong Kong, in 1997—the year before its insolvency law changed—there were 639 bankruptcy orders, 33 initiated by the debtor and 606 by creditors. By 2001, there were 9,151 orders, 7,389 of which were initiated by the debtor and 1,762 by creditors. There are equivalent examples in Scotland. That is because consumers, rather than entrepreneurs, take advantage of the reduction. I do not believe that the figures demonstrate that the number of entrepreneurs in these circumstances is falling. It is much more because the number of consumers taking advantage of the reduction is considerably increasing. A greater burden is placed on business as it is unlikely that unsecured creditors will agree an individual voluntary arrangement with the consumer bankrupt; there is no incentive if the discharge period is shorter.
	There is no restriction on how short the period should be. Earlier, I gave the example of eight weeks. It will be the time that it takes the official receiver to file a notice at court that no investigation is necessary.
	I understand that the reaction of the Department of Trade and Industry to the survey by the Centre for Economics and Business Research has been that the modelling assumptions are flawed and do not take into account economic factors such as interest rates. As I understand the position—I have checked this with the consultancy—the modelling assumptions do take account of economic variables, including interest rate levels, income and debt levels, and the prevailing macro-economic conditions. I understand that this has now been explained to the department. The findings of 13,000 additional bankruptcies a year are in addition to any changes in bankruptcy levels caused by changes in these variables.
	If the Minister intends in his response to repeat the DTI line, I point out to him that I should feel much more reassured if the department had carried out research. As I understand the position, it has not commissioned any research on this issue. I am, therefore, not sure on what basis the department's line that there will be no change is based.
	An increase in bankruptcy will result in the official receiver not having the resources accurately to investigate. I understand that there is some thought that consumer bankruptcies will be subject to telephone surveys or standard questionnaires. I do not for one moment believe that those are sufficient. The official receiver will require appropriate training and competency levels to ensure that they have the ability, the resources and the inclination to ensure that the system does not become open to abuse.
	In conclusion, I raise these points from a genuine belief that we must assist the entrepreneur and do our best to ensure that enterprise is not stifled. At the same time, we must take every possible step to ensure that in this Bill we do not create a rogue's charter. While we accept that all the restrictions and sanctions of bankruptcy will remain, the perception among many will be that if one can get out of bankruptcy within a few months or weeks, this becomes a more attractive option. That is why it is essential to have a fixed minimum term. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I do not wish to weary the House with a repetition of the excellent points made by my noble friend, but there are one or two additional points to be made. As my noble friend Lord Patten has said, there is an issue of public confidence. The Minister indicated in Committee (at col. 826 of Hansard) bankruptcy will not be pain free. But if there is to be no minimum period, that comes jolly close to it—and for the persuasive bankrupt, very close indeed.
	The Minister indicated also—a point which I find extraordinary—that,
	"There was wide support for the one-year discharge period in responses to the White Paper".—[Official Report, 30/7/02; col. 825.]
	I understand that, and such a proposal has been put forward. However, the provision that the amendment seeks to delete offers the chance to drive a coach and horses through the idea of the one-year period by allowing no discharge period at all. The CBI has expressed strong concern, as have many credit organisations.
	There is a second problem in having a provision for automatic discharge; namely, potential regional disparities. As my noble friend Lord Freeman pointed out in Committee, different levels of resources and different processes could lead to different results in terms of automatic discharge.
	The Minister and his officials will no doubt have seen an interesting article in the Financial Times by David Storey, the director of the Centre for Small and Medium-sized Enterprises at Warwick Business School. He argues powerfully that there is a law of unintended consequences. Attempts to provide a way for people to get away from bankruptcy can lead to severe consequential costs as regards the availability of credit. He uses the US example of Texas and Connecticut. The procedure in Texas is very liberal: a bankrupt's home is exempt and up to 30,000 dollars. In Connecticut, all the debts have to be repaid in full. The result has been a drift of bankrupts to Texas to take advantage of the arrangements there; but business credit availability in Texas has consequently been reduced. The availability of business credit is better in Connecticut. If we liberalise the situation—I use the word "liberalise" advisedly—in the way proposed in the Bill as presently drafted, we must think about the consequences in terms of the impact on small and medium-sized enterprises and on credit availability.
	I, along with many other noble Lords, have received letters from MBNA Europe Bank Limited pointing out the ratio for personal bankrupts; namely, that an average bankrupt costs 26 times the profit earned on the average customer. So the cost of personal bankruptcies will be severe to the full and proper payer.
	I do not propose to quote again the Centre for Economics and Business Research. It seems to me that it has some powerful arguments, and they were powerfully made by my noble friend. My view is that there should be some irreducible minimum period which keeps faith with those who have lost in the bankruptcy, be it creditors, employees, taxpayers or others. While I appreciate and applaud the fact that the Bill may be about reducing the stigma of bankruptcy—and that is fair enough—we should not eliminate the stigma. There needs to remain a measure of deterrence. That is why I support the amendment.

Lord Patten: My Lords, I am very happy to follow my noble friend Lord Hodgson, who is absolutely right to say that there should be an "irreducible minimum period" before people could discharge their bankruptcy. I also agree with him on the other three important points that I believe he made.
	My noble friend Lord Hunt, who is leading us in this debate this evening, is quite right to warn the House to be awfully chary of creating something that turns out to be a "rogues charter", which is a very telling phrase. I worry very much that we may, inadvertently, in this Bill—many parts of which I applaud—be creating an opportunity for a revolving door of a few hard cases going in and out of bankruptcy in order to manifest the worst extremes of pyramid selling, or of other corrupt practices, that we have seen in the past decades.
	What worries me more—I look to the Minister in his normal cheery way to clear up this point—is the suggestion by my noble friend Lord Hunt that this excellent piece of research, which is fundamental, has effectively been rubbished by the spinners of the Department of Trade and Industry as being somehow unfounded—a department of trade and industry that has not itself carried out such research. I do not know whether my noble friend Lord Hunt agrees with me, but I find that rather worrying. I am not normally one of your Lordships belligerent tendency, but if that turned out to be the case and it has just been dismissed out of hand by the spin doctors at the DTI, I believe that I would join the belligerent tendency.

Lord McIntosh of Haringey: My Lords, I do not know whether this could be thought to be belligerent, but, if I believed that there was any real substance in the research that noble Lords opposite have quoted with such approval, I would not be satisfied by tabling an amendment that said that there should not be any discharge from bankruptcy before the period of one year; indeed, I would be opposing the provisions in the Bill much more widely. I ask the House to consider why we find ourselves in this situation. If noble Lords seriously believe that there will be an increase of 50 per cent in the number of bankruptcies as a result of changes in legislation—in fact, the research points to 53.5 per cent—I wonder whether they should be satisfied with such modest amendments at this time.
	I have to say that both the understanding—

Lord Hunt of Wirral: My Lords, I feel that I should answer the question that the Minister just posed. I did not speak at great length to the proposals in Amendments Nos. 267, 268 and 269. The noble Lord must surely appreciate that I was seeking to accept at face value the assurances that he gave when we debated the matter in Committee. There needs to be some further consideration in the light of the findings of this report. That is provided for in the provisions set out in the subsequent amendments; and, indeed, answers the question that the Minister just raised.

Lord McIntosh of Haringey: My Lords, that is why, if the House will allow me, I propose to spend some time in dealing with our understanding, and my understanding, of the issues that have been raised both by the research and by the amendments.
	Judging by the speech made by the noble Lord, Lord Hunt, there seems to have been a very considerable misunderstanding of the nature of the changes that are being made. If we look at the Explanatory Notes to the Bill, we can see the differences. The really important change being made in the Bill is not a general reduction in the period for discharge from bankruptcy, but a distinction that is being made between culpable bankrupts and those who are less culpable. Under the provisions of the Bill, culpable bankrupts are to be subjected to bankruptcy restriction orders—or, sometimes, agreements, if possible—which extend for a period of at least two years, and up to 15 years, following discharge.
	The protection of the public, which is a very important concern in the way that we are considering bankruptcy here, is very much to be found in those restriction orders and their inherent seriousness. At present, the duration of the bankruptcy is the same generally for bankrupts, regardless of culpability or the level of their assets or liabilities. Therefore, we propose that there should be an automatic discharge one year after the bankruptcy is made. However, if the official receiver files a notice stating that further investigation into the bankrupt's conduct or affairs is unnecessary, the period may be reduced. That is the burden of Amendment No. 266.
	We do not expect all bankrupts to be discharged before the automatic 12-month period has elapsed. That will happen only when any administrative work is complete, where the bankrupt has co-operated fully with the official receiver, and where any matters raised by creditors are investigated to the satisfaction of the Insolvency Service. I make the point that the creditors always have to be kept informed. If the grounds are not satisfied, the discharge period will stay at 12 months.
	As I said, we are introducing a tougher regime of bankruptcy restriction orders for those bankrupts whose conduct has been irresponsible, reckless, or otherwise culpable. Those orders will place restrictions on bankrupts for between two and 15 years, and—in answer to the point made about serial bankruptcies—any previous bankruptcies will be taken into account by the courts when considering bankruptcy restriction order cases.
	I turn to the issue of whether there is a distinction between consumers rather than business. Surely such a distinction is artificial. The Bill should be seen as a whole, and the general reduction of stigma on bankrupts is aimed at stimulating enterprise in broad terms, but that does not apply to those who are culpable. People who find themselves being made bankrupt through no fault of their own may be in business, or may be individuals, but it happens. The bankruptcy restriction orders regime will cover both consumers and traders, as well as acting as a deterrent for the irresponsible and reckless. It will, therefore, provide greater protection in future for the public and the business community. Therefore, consumer bankrupts who behave irresponsibly could find themselves subject to restrictions for between two and 15 years.
	I do not know how much of this argument will be dependent on the research from the Centre for Economic and Business Research. I have great respect for its director, Doug McWilliams, who is a former director of research for the CBI. I am not sure how much your Lordships will wish me to say about the detail of the research. However, I have been provoked into speaking about it by the noble Lord, Lord Patten.
	I am a researcher; I am not an econometrician. We are talking about a piece of econometric research, rather than economic research. Perhaps it ought to be economic rather than econometric research. However, having read the report and considered the issues raised in debate, I simply do not believe that the effect of any bankruptcy legislation, let alone the bankruptcy legislation introduced in this Bill—and still less the provisions for early release before the period of 12 months—could have the effect anticipated by the research. I say that both having looked at the research and having considered the evidence that is available from other pieces of research.
	The starting point for the CEBR research is an assessment of the effects of the Insolvency Act 1986 on bankruptcy numbers. It rightly says that the 1986 Act made significant changes to bankruptcy law. However, the research then makes the assumption that the 1986 Act accounted for 68 per cent of the subsequent increases in bankruptcy. We have to consider the relative importance of macro-economic factors and the effect of legislation. Yes, the research took account of debt levels to income ratio, of interest payments to income ratio—both long-term and short-term—of unemployment, of GDP, of interest rates, and, curiously, of divorce decrees, although I do not quite understand the significance of the latter.
	But research carried out by other distinguished researchers, including Professor Lawrence M Ausubel of the University of Maryland who reported to the Senate Committee on Bankruptcy in 1998, suggests that other significant factors should be taken into account, not least since the research was carried out on behalf of a credit card company and considering the number of credit cards issued.
	Professor Ausubel said that 98 per cent of the variation in the personal insolvency rate during 1987 to 1996 can be explained by four factors: the increase in the number of credit card accounts; the household debt burden; unemployment; and interest rates. Another researcher, Stuart Feldstein, added to that list decreased savings levels, which sounds plausible.
	Without entering a further debate on the quality of the research, which has been accepted uncritically by noble Lords opposite, surely it is implausible that changes in bankruptcy legislation could have such an important effect on the numbers of bankruptcies in comparison with macro-economic factors such as those mentioned above. It is totally implausible to me as someone who has spent his entire life in economic and survey research. If that were to be the basis of the argument then I would look to different conclusions from the amendments. Those we have here would make a substantive change; they would make it impossible for there to be any discharge from bankruptcy before the period of 12 months. That is a legitimate point of view that was properly argued.
	What was not shown in any way was how that is likely to have an effect on the number of bankrupts as analysed by the Centre for Economic and Business Research. If it were true that as a result of the Bill there would be an increase of 50 per cent—13,000—in the number of bankrupts, noble Lords opposite would be honour-bound to propose far more radical changes to this part of the Bill. Indeed, if I were them I would be moving to take out the entire part of the Bill relating to individual bankruptcies. They are now calling into question what has not been called into question at any earlier stage.
	We are now on the last day of Report stage in the second House. Noble Lords opposite are calling into question the basis on which we have consulted, drafted, revised, legislated and subjected ourselves to parliamentary scrutiny. It is not plausible or acceptable for these amendments to be put forward on the arguments that have been advanced. I ask the House to reject them.

Lord Hunt of Wirral: My Lords, I reiterate how strongly I and my colleagues support the Government in their objective of creating a more entrepreneurial culture in the United Kingdom, as well as their moves to provide more effective protection against reckless and culpable bankrupts.
	Having said that, I hope that the Minister will accept that the independent economic analysis produced by the Centre for Economic and Business Research causes us to think carefully about the consequences of what he has proposed. If the Bill were to cause bankruptcies to double, even on the most cautious estimate, that would be an increase of over 13,000 per year, at a cost of £76 million per year to unsecured lenders. If lenders were to adjust their margins to take account of that, lending rates would have to increase for all.
	Alternatively, lenders could seek to exclude more borrowers to minimise the increased risk of bankruptcy losses. That could exclude 170,000 people from the credit market. The individuals most likely to be affected are those already at the margins of the lenders' portfolio, at the lower end of the social spectrum.
	On careful reflection, the Minister must surely accept that that would work against our efforts on all sides of the House to improve social and financial inclusion and the commitment to tackle loan sharks. I have not even mentioned the effect on the economy.
	The Minister cast doubt on the situation in the United States. I shall reflect on what he said, but the analysis in the report is based firmly on UK figures. There is no doubt in my mind that if US data had been used, the estimates would have been higher still.
	I turn to the Minister's challenge: if I believe the research, why have I come forward with such a limited amendment? There are other amendments on the Marshalled List. I and those to whom I have spoken about the provisions believe that there must be four amendments or groups of amendments to rectify the point raised by the Minister. This group deals with restricting the bankruptcy discharge period to a fixed period of 12 months. The Minister has analysed it and said that he is not willing to accept the amendments, but there are amendments tabled seeking that the official receiver's obligation to investigate the bankrupt's conduct should be mandatory in all cases.
	At the moment there is a discretion as to whether to investigate. Without mandatory investigation it is impossible to see how the Minister can make a distinction between culpable and non-culpable bankrupts; the honest and the dishonest. How can a proper decision be made and how can creditors have any confidence that their interests are being protected if in a substantial number of cases the official receiver does not investigate at all?
	I turn to income payments orders, which are intended to ensure that bankrupts make an affordable contribution towards their debt from their income for up to three years. The proposed legislation states that the income payments orders will last for up to three years irrespective of discharge, but will not last longer than three years. We believe that the length of the order should be left to the courts or to the trustee's discretion.
	In seeking to defend the existing provisions, the Minister referred to the bankruptcy restriction order process to deal with culpable bankrupts. I welcome warmly the bankruptcy restriction orders, since they would provide a longer period of restriction than is currently proposed. However, the orders should not be overestimated as a deterrent in the context of such fundamental changes to the system. The primary effect of such an order is to restrict the bankrupt's ability to run a business.
	Of course it will impact on business, but how will it impact on the majority of consumer bankrupts? These orders are likely to be limited in any event because of the cost of applying for an order and the difficulty in proving unacceptable conduct. Should not the court have power to impose financial penalties in appropriate cases as an additional disincentive against abusing the system?
	I hope the Minister will see that I have not brought forward the amendments with only a minimal consideration of the latest statistical analysis. We are proceeding down a potentially very dangerous road. I have sought to warn the Minister about it. He has cast some doubt on the economic research. I shall go away and discuss his criticisms with those who have produced the research. If I find that there are fundamental flaws such as he has outlined, I shall want to reconsider the matter. Obviously, I need time now to take further evidence.
	I would not dismiss the evidence from those who have experience of the United States, such as the Maryland Bank of North America, which has been referred to in previous debates and which has a genuine interest in seeking to ensure that the provisions do not have the impact on the number of bankruptcies that the research shows that they could have. We are all united in that respect and in wanting to create a more entrepreneurial culture in the UK. However, as the Finance and Leasing Association has pointed out, we have to tread very carefully when changing so fundamentally a structure that has worked so well to date.
	I shall take time to reflect on the issue and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 267 to 269 not moved.]
	Schedule 20 [Schedule 4A to Insolvency Act 1986]:
	[Amendments Nos. 270 to 273 not moved.]
	Clause 253 [Investigation by official receiver]:

Lord Kingsland: moved Amendment No. 274:
	Page 182, leave out lines 28 and 29.

Lord Kingsland: My Lords, as with compulsory liquidation, the official receiver's obligation to investigate the conduct of the bankrupt should be mandatory in all cases. The clause leaves the decision on whether to investigate to the discretion of the official receiver.
	We believe that an investigation should be conducted, in all cases, to justify a decision on whether it is appropriate to bring an application for a bankruptcy restrictions order. The report should be filed with the Secretary of State as well as the court, to enable a decision to be made on whether to bring such an application. Without that, it is impossible to see on what basis a proper decision can be made. Nor will creditors have any confidence that their interests are being protected.
	If the number of bankruptcies increases significantly under the new system, as we anticipate, the importance of investigating each case will increase to prevent the abuse of the system. That should be addressed by the provision of appropriate levels of training and resources rather than by removing the obligation to investigate. I beg to move.

Lord McIntosh of Haringey: My Lords, we have seen this amendment before in this House and in another place. Its aim is to ensure that there is a mandatory duty on the official receiver to investigate all cases. The Insolvency Act 1986 introduced for the first time the concept that the official receiver did not have to investigate in small cases—that is, where the bankrupt had unsecured liabilities of less than £20,000. Such cases are termed "summary bankruptcies". The official receiver has used that discretion to investigate for 16 years.
	Summary cases account for a large proportion of the annual total of bankruptcy cases. For the remainder of non-summary cases, there is a mandatory duty on the official receiver to investigate. The exercise of that discretion has been carried out responsibly and effectively by the official receiver and has not, as far as I am aware, led to any significant number of complaints from creditors or other interest groups in the past 16 years.
	The Bill will remove the existing provisions relating to summary bankruptcy and introduce discretion to investigate in all bankruptcies, including the larger ones. That will ensure that resources are properly targeted and used effectively. Every case will be looked at on its merits, based on an assessment of the facts, rather than, as is currently the case, taking the level of unsecured debts as the deciding criterion.
	Some cases with large unsecured debts do not merit investigation and some cases where the unsecured liabilities are less than £20,000 do require investigation. What is important is that all cases that warrant it are investigated.
	The amendment would require the official receiver to conduct a full investigation into every case without regard to its individual facts and circumstances. That would go further than the current position and would be a wasteful use of investigative resource.
	There may be concerns that if the duty to investigate is made discretionary, some who show misconduct or are potentially guilty of criminal offences might slip through the net, or that resource pressures on the official receiver will mean that cases that should be investigated are not fully investigated. Under the new regime there will be little change to the way in which bankruptcies are currently handled. As is currently the case, the official receiver and his staff will continue to interview all bankrupts. Only then will the decision be made on whether further investigation is appropriate. Creditors will continue to receive a report on the case after a few months, when they will be asked to tell the official receiver about any matters that, in their view, warrant further investigation. The official receiver will then consider any matters brought forward by creditors and investigate those that warrant it.
	It should be remembered that even after a case has been investigated under the current system, very little can be done to address misconduct, other than criminal sanctions in a very small number of cases. The bankruptcy restrictions order regime introduced under these proposals will provide an effective weapon at the official receiver's disposal and will significantly improve the level of public protection. That will allow a distinction to be made by all, including the credit industry, between those who show misconduct and those who do not.
	As I have already said, the Bill allows for the proper and focussed targeting of investigative resources on those cases that merit it, and we see no reason to amend it. I hope that that shows that I do not support the amendment.

Lord Kingsland: My Lords, this time the Minister has made that clear. He thinks that the safeguards in the Bill are sufficient to allay any fears that I might have about the operation of the system. In those circumstances, I shall not press the amendment again on Third Reading and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Davies of Oldham: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begin again not before 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

London Local Authorities and Transport for London Bill [HL]

Lord Graham of Edmonton: My Lords, I beg to move that this Bill be now read a second time. I do so as the joint president of the Association of London Government, with the noble Lord, Lord Jenkin of Roding. I am delighted to see him in his place and intending to speak.
	The Bill has been promoted by one borough—Westminster City Council—on behalf of all the other London boroughs and Transport for London. London local authorities have a long tradition of using their powers to promote private legislation, often because of the limited time available for public Bills. This Bill follows squarely in that tradition. It seeks new powers to help London's local authorities respond to the challenges that they face. Specifically, the Bill seeks to improve the management of traffic, to free up police time to deal with more serious offences and to enhance the quality of life for Londoners.
	The joint promotion between the London authorities and Transport for London is a clear sign of close working together between all the traffic and highway authorities in London. This is an excellent example of what can be done if political differences can be put aside for the good of all Londoners. I am glad to say that there is a strong political consensus among all the parties in support of this legislation.
	I begin with Clauses 3 to 6, which seek to decriminalise some minor traffic offences to allow effective and efficient enforcement. London boroughs and Transport for London believe that by decriminalising some minor traffic offences, police time can be spent on more serious offences and alternative enforcement can be effectively conducted at no additional expense to the public purse. The Bill's promoters propose that offences such as the infringement of rules on box junctions, vehicles making right or left turns in prohibited locations, and vehicles entering pedestrian zones should be managed in a similar manner to the existing enforcement regime for bus lanes—by camera. In areas where cameras police bus lanes, there has been a major reduction in the number of bus lane contraventions. The use of camera technology has also proved successful in policing box junctions.
	Local authorities and Transport for London police the majority of London's bus lanes using powers obtained under the London Local Authorities Act 1996. The process for the enforcement of bus lane use and the system proposed for other minor traffic offences is similar. In both cases, liability generally rests with the vehicle keeper. There are of course some exceptions, such as hire vehicles. Specific provision for hire vehicles is currently made in Clause 6, but amendments simplifying those provisions will be sought at the Committee stage.
	Clause 4 makes provision for decriminalising the enforcement of the London night-time and weekend lorry ban. Local authority officers already enforce this scheme. The officers take prosecutions to the magistrates' courts. Magistrates can, and do, impose fines of up to £1,000 on operators guilty of breaching the ban. The London lorry ban minimises the environmental impact of heavy lorries in London. The scheme does not prevent essential night and weekend deliveries being made; it simply prevents excessive and unnecessary lorry traffic at these times. The Bill provides for no changes in either the scheme itself, the legislation which governs it, or the liability for penalties. It would also ease the pressure on magistrates' courts.
	Clause 7 proposes that councils should be able to share information—such as car ownership—obtained through the Bill's powers with other borough councils and Transport for London. This will aid enforcement of a wide range of vehicle-related offences, including tracing the owners of abandoned vehicles and tracking those who would choose to collect unpaid parking tickets.
	Noble Lords—especially those who frequently travel on the capital's roads—may be surprised to hear that surveys have shown that there is a £100-million road maintenance backlog in London. The Bill proposes in Clause 8 to allow surplus revenue from the highway authority's parking accounts to be used to reduce this backlog. These accounts receive all income from parking traffic enforcement and have statutory limits on the use of any surplus.
	In some parts of London where the demand for residents' parking permits is particularly high, fraudulent applications are not uncommon. Such fraudulent applications are an offence. Currently, however, the time limit for bringing prosecutions is so strict that fraudulent application can escape prosecution because of the time taken to gather sufficient evidence. Clause 9 provides that prosecution can take place at any time within six months of suitable evidence coming to light and at any time within three years of the offence being committed.
	The Bill seeks in Clause 10 to provide a London-wide decriminalised offence of parking alongside dropped pavements. Such parking can block entries to drives and garages and block crossing points for wheelchair users and those with pushchairs and prams. The clause will extend the powers that highway authorities already have to enforce this rule in controlled parking zones. The Association of London Government has agreed to draft and consult on a code of practice for the enforcement of this contravention.
	After all the avenues for challenging the parking or traffic penalty have been exhausted, if the penalty remains unpaid, the authority will register it as a debt at the county court. At this point, the vehicle's keeper may make a statutory declaration if he did not receive the original parking notice or the council or adjudicator did not respond to his appeals. Clause 11 seeks to close some of the loopholes which have occasionally been used by vehicle owners making improper statutory declarations.
	Clause 12 deals with cases in which a property owner drives his vehicle over the pavement into his property without an authorised footway crossover. It is preferable for a number of reasons for council-approved measures, including dropped curbs, to be constructed where people wish to drive over the pavement into their property. Such approval can be given under Section 184 of the Highways Act 1980. This is to avoid damage to the curb and to allow for the protection of any underground services such as water or gas mains under the footway. Under this clause, it would be an offence, if no approval for the crossing has been given, for the property owner to drive across the pavement to park on his property. If the council has served a notice requiring the property owner to desist, in extreme cases, the highway authority may erect bollards or similar devices to prevent vehicles from being driven over the highway. Clause 12 includes an appeal mechanism, in the county court, for aggrieved property owners.
	Clauses 15 to 18 concern current offences that highway authorities may prosecute in the magistrates' courts. These offences include, for example, obstructing the highway or depositing material on the highway. These clauses will allow the authorities to issue fixed-penalty notices in these cases rather than prosecuting each case separately in the magistrates' courts.
	Clauses 19 to 21 propose giving highway authorities enhanced powers to remove items unlawfully deposited on the highway. The powers are aimed particularly at persistent offenders, such as shop owners who litter the pavement with their goods, often causing an obstruction.
	I should make the House aware that, of the 19 petitions originally submitted against the Bill, none are left. That is due mainly to the withdrawal by the promoters of Clauses 13 and 14, which concerned the reinstatement of street works and obligations to statutory undertakers to place apparatus in the street so that subsequent works do not require the street to be broken up again. I am pleased to say that, as the Government themselves are considering such proposals, the promoters have been happy to drop those clauses.
	There was one further petition against the Bill, from the London Forum of Amenity and Civic Societies, on some technical matters. However, that petition has now been withdrawn as well.
	I apologise to the House for having spoken at such length, but, given the nature of the Bill, I am afraid that that was unavoidable. I hope that the House will give the Bill a Second Reading. I look forward to hearing the speeches of other noble Lords who have indicated that they wish to follow me. I beg to move.
	Moved, That the Bill be now read a second time.—(Lord Graham of Edmonton.)

Lord Peyton of Yeovil: My Lords, I hope that I might be forgiven, and not misunderstood, if I start by saying that the noble Lord, Lord McIntosh of Haringey—who is on the Front Bench to make observations on behalf of the Government in relation to this debate—has been on that Bench all afternoon dealing with the Enterprise Bill. Noble Lords who are now in the Chamber might already understand that. I hope that the Government—I say this without the slightest irony—realise how fortunate they are to have such a servant as the noble Lord.

Noble Lords: Hear, hear!

Lord Peyton of Yeovil: My Lords, I wish that I could go on in that cordial note, but unhappily that is simply not possible. As I see it, this Bill is designed to make life easier and more comfortable for those who make a practice of doing exactly what they think in the way they think and who care not a rat what is said about them by ordinary members of the public or even in your Lordships' House. I have been speaking fairly regularly, and for quite some time, about the highway authorities' neglect in discharging their duty to keep the roads clear for movement. They have never shown the slightest sign of any interest in anything that has been said in your Lordships' House, for which I am slightly sorry.
	The noble Lord, Lord Graham, is an old friend of mine and I wish that I did not oppose a Bill which he is sponsoring. Nevertheless, I am sure he understands that I feel extremely strongly on this matter. I hope that he will convey to the sponsors of the Bill my strong disapproval of the way in which they normally conduct themselves. The noble Lord made the point that a number of activities will be decriminalised. Let no one misunderstand why that comforting thing is to happen. Certain practices will be decriminalised to enable the authorities to make free use of cameras in order to obtain money more easily, more readily and in larger quantities from the public without any possibility of protest.
	I refer to the question of holes in the road. I may have a simple approach to these matters, but I have always been under the impression that it is the duty of the highway authorities to check carefully the duration of an operation on a road by a utility or anyone else to avoid repeated similar occurrences and also to ensure that subsequent repairs are carried out efficiently. As far as I am concerned, they have failed lamentably in that duty. I do not see any grounds why people who fail lamentably in their duty should have further powers conferred upon them by Parliament without even a please or a thank you, which is what we are being invited to do today.
	Not only do they fail to control the activities of other people on the highways; they actually commit the same sins themselves. They are responsible for the same sort of things. They litter the roads with cones. They do not show any signs of haste. Often cones are spread out all over the highway and absolutely nothing is done. They seem to have favourite beats to which they return time and again while they perform their tasks without any very great energy and without always being there to perform them. Nevertheless, the cones are there as their representatives.
	When I read the Bill for the first time I was disposed to say that, having looked at it, I did not feel very pleased with any of the clauses except Clauses 13 and 14. In my copy of the Bill I wrote down that they were splendid but that I had no confidence whatsoever in the highway authorities' readiness or inclination to use them. That is the proof of what I had rather suspected; namely, that local authorities have been very willing to abandon these matters which seem to me to have at least a grain of sense and merit as regards ordinary members of the public.
	The Mayor of London is quite a joker in the pack. I give him credit for his sense of humour, but I very much wonder where the last laugh will be and what kind of chaos we shall be confronted with next year. One of the fancier schemes to which I particularly refer as an illustration of what I am getting at concerns Trafalgar Square. There was widespread consultation on Trafalgar Square. I spoke to someone who was among those consulted who said, "We were consulted. We were told what they were going to do". It was made clear at the end of the process which was blessed with the name "consultation" that people's views had been listened to but that they would not have the slightest effect as the relevant authorities would do what they had planned to do anyhow. There was no attempt to have a trial period. Cones could have been put down while an assessment was made of whether the scheme would work and what the consequences would be. But no, such people are always right and the rest of us are always wrong. So, on this occasion they did not bother to have a trial period and they went ahead.
	As my noble friend Lord Lloyd-Webber said last week when I raised this matter, such a policy has had a disastrous effect as regards those companies that bring audiences to the London theatres by coach. One night last week—admittedly the rain co-operated in this result—a coalition of bad weather and the authorities resulted in an audience of two attending a good show at a popular London theatre—the Garrick Theatre. So far no tears have been shed on this matter. No one has said that second thoughts should be given to it. There are no expressions of regret. However, I believe that some of those responsible were surprised to learn of the disastrous effect upon London theatres that the Trafalgar Square scheme has had.
	There is no need for me to prolong my remarks. However, in this day and age, instead of having public servants we have public managers who know better than we do and who never listen to what we say whether we are Members of Parliament or members of the ordinary public. We are growing accustomed to being ignored. I personally have had enough of that. I hope that at Third Reading some of your Lordships may at least consider, as I shall, what this Bill merits and what the people who are promoting it—I am not talking about the noble Lord—merit. I am glad to have the opportunity to express my distaste for the measure.

Lord Jenkin of Roding: My Lords, I, too, must declare an interest in that I share with the noble Lord, Lord Graham of Edmonton, the joint presidency of the Association of London Government, which is one of the groups behind the Bill. I thank the noble Lord for the effective way in which he described the provisions of the Bill.
	In general I support the Bill because there is no use Parliament passing laws, whether they constitute primary legislation or regulations, if they cannot be enforced. The fact that large numbers of fines are not paid and large numbers of offences never achieve the retribution they should have done—all of which contributes to blocking traffic in London—does not seem very sensible. Therefore, I support measures which will make it easier to enforce the relevant laws. Having said that, I have the greatest sympathy with the noble Lord, Lord Peyton, who, if I may say so, is unlikely ever to be ignored when talking about this or most other matters. He has been almost a one man campaign with regard to holes in the roads and the dilatoriness of the relevant bodies in dealing with them. It is on that matter that I, too, should like to say a few words.
	I wish to refer to two clauses that are in the Bill at present although they may be dropped at a later stage. I refer to Clauses 13 and 14 which deal with the reinstatement of surfaces that have been dug up by contractors or whoever and the question of placing certain apparatus in the street which may make it unnecessary to dig it up again. As the noble Lord, Lord Graham of Edmonton, said, the reason for the proposal to drop the clauses is that the Government are themselves considering such proposals. My observations, such as they are, are therefore addressed not to the noble Lord, Lord Graham, but—I have previously described him in this way—to that hard-working maid of all work on the Front Bench, the noble Lord, Lord McIntosh, who will respond on behalf of the Government.
	It so happens that as chairman of the Foundation for Science and Technology I chaired a workshop earlier this month on London's subsurface infrastructure. In particular, we considered the question: what can science and technology do to help with the renovation and replacement of London's subsurface infrastructure? The main speakers at that seminar happened to come from Thames Water but much of what they said applies equally to the other undertakers; that is, gas, electricity and telecoms. The House will be relieved to hear that I do not regard this as an appropriate occasion on which to rehearse all of the rather exciting statements that were made and promises that were held out about what new technology can offer in this field. There are now new ways of locating pipes and cables without digging up the streets. In some cases, one can use GPS—geostationary positioning satellites. There is a technique known as "keyhole excavation", which does not require holes big enough for a man to go into; it can be carried out in a way that is similar to keyhole surgery. There is trenchless repair, on which I shall say more in a moment. Substantial technology is available to enable one to repair and replace underground pipes and cables without disturbing the surface at all. There is also the question of the remote internal repair of pipework. I could go on but this is not perhaps the moment.
	My questions are for the Minister. As he will acknowledge, I gave some notice of them earlier today. What are the Government doing to further the use of technology in relation to reducing and perhaps avoiding the need for so many holes in the road? Is the Minister aware that there exist, in this country and internationally, societies for trenchless technology? Is he aware that only last week there was an exhibition at Stoneleigh Park in the Midlands, at which examples were given, at what is called a "no-dig live show", of what can be done using such technology?
	The society attempted to interest His Royal Highness the Duke of Edinburgh in this technology. Representatives of the society showed him some pictures of proven trenchless techniques that are now in use worldwide. His Royal Highness kept saying, "I have never seen any of this!". Of course he has not; it is all underground. There is nothing visible on the surface and traffic is not held up. They took His Royal Highness to see two sites, both within a couple of miles of Buckingham Palace, and showed him successful trenchless work in progress.
	My second point underlines what was said by my noble friend Lord Peyton. Under our system, no one has a statutory obligation to try to keep the traffic moving. That obligation does not exist in our law. My noble friend mentioned the highway authorities, but they do not have that responsibility. Yes, they build roads, repair roads, clear landslides and dig out snowdrifts but they are under no statutory obligation to keep the traffic moving. The undertakers—gas, water, electricity and sewerage—often get blamed, although it is often the highway authorities who are guilty of causing the obstruction. I was given some evidence from a gentleman who,
	"kept counts of queuing traffic, and the number of men working, at many obstructions over the years . . . the most dramatic was one where a gang of three men were creating queues totalling over six hundred vehicles!".
	If someone had taken 600 vehicles off the road for a day by impounding them, the effect on the national economy would have been exactly the same as that in this particular hole-in-the-road incident but the uproar would have been deafening. The fact is that those of us who get caught in these long traffic tailbacks from roadworks are there temporarily and we do not complain. On this occasion, however, both my noble friend and I are complaining. There must be someone who has a duty to keep the traffic moving. I ask the Minister, when they are considering the provisions that are equivalent to those that will be withdrawn when the Bill reaches Committee, is it the Government's intention to remedy what I see as an astonishing lacuna in our law?

Earl Attlee: My Lords, I am extremely grateful to the noble Lord, Lord Graham of Edmonton, for introducing this Bill and for describing it with his usual skill; to the Minister, who appears to be a hero this evening; and to my noble friends Lord Peyton and Lord Jenkin. I remind the House that I have an interest: I am president of the Heavy Transport Association.
	It is my intention to remark on the activities of Transport for London, to query the London night-time lorry ban and to support Clause 13. I do not intend to oppose the Question whether the Bill be read a second time.
	Many provisions in the Bill are sensible, such as Clause 9, which relates to fraud offence time limits. However, the Bill is entitled, "London Local Authorities and Transport for London Bill". "Transport for London" is a bit of a contradiction in terms because the management of road traffic in London is a nightmare. My noble friend Lord Peyton of Yeovil discussed that in detail in his excellent speech. Consider, for instance, traffic lights, which are controlled by TfL. We have been told that they have been re-phased, ostensibly to favour pedestrians. However, I have walked in London for many years and never experienced any problems with the phasing of traffic lights; I was not aware of a problem. Moreover, drivers thought that traffic lights were phased for the benefit of all. It now appears that that might be a softening up for congestion charging. However, congestion charging is not really relevant to the Bill. Its only effect will be to have more affluent drivers stuck in traffic jams.
	TfL appears to have complete and possibly deliberate disregard for the needs of motorists. Typical examples are at Vauxhall Cross and the roadworks at Apex Corner on the A1/A41 junction in north London; my noble friend Lord Peyton also mentioned Trafalgar Square. I understand that average speeds in London have recently been severely reduced although traffic levels are also slightly down.
	It is interesting to compare the ethos of officials from the Highways Agency with that among those working for local government. Highways Agency officials always seem to be seeking some new way of reducing congestion. I accept that there is an argument for reducing the use of private cars in London. However, the policies of TfL are drastically increasing the cost of taxicabs in London. That will tend to encourage private car usage for reasons of economy. Also, it will make London a more expensive city in which to operate. My noble friend Lord Jenkin put his finger on the cause of the problem; that is, no one appears to be responsible for keeping traffic moving.
	However, my main concern tonight is the operation of the London night-time and weekend lorry ban. In referring to that, I must apologise to the Association of London Government, which invited me to see the enforcement of the ban in operation. But, because my noble friend Lord Cope suddenly increased my workload, I found that I was unable to carry out the visit.
	Why do we have such a lorry ban in a 24/7 society? The noble Lord, Lord Graham of Edmonton, touched on some of the reasons. But the history of it is that, on completion of the M25 motorway, HGV drivers found it hard to kick the habit of driving through central London. In addition, at that time, the trucks were very noisy and polluting. I well remember the crockery and glasses in my mother's house vibrating as the trucks pulled up the hill. They do not do that now.
	The present situation is that no HGV driver goes through London if he can avoid doing so—it is simply too slow. For the operators, not only is it slow; it wastes time, is expensive in terms of wear and tear on the vehicle, and there is also a far higher risk of an accident occurring in London. It is far better and safer to use the motorway. Finally, it costs far more to employ a driver to work at night.
	Privately, some noble Lords have asked me, "Why are we discouraging night-time deliveries and collections?". I put that question to the officials of the Association of London Government, whose answer, more or less, was, "Oh, we don't want to stop trucks delivering during the day. If we did so, we would reduce congestion and that would suck in more traffic". The Minister is looking aghast at me, but that is what they said.
	It is not only a question of the desirability of the lorry ban; I am not convinced that it is being implemented fairly and sensibly. One particular case came to my attention. I hasten to say that it is no longer sub judice as the case has been disposed of. It concerned an operator who had the necessary permit to operate in the banned area at night. But the difficulty was that his driver had failed to minimise the distance travelled off the exempted route, as per Condition 5 on his permit. He took a road which was wider and safer; there was less residential accommodation in the area; and it was quicker. I drove down that road. In other words, the driver used his common sense. The prosecution process took place but, when the official of the ALG discovered that he was to face an experienced transport lawyer, he suddenly found that he could not get to the court. Eventually, the case was dropped.
	If we pass the Bill as drafted, it will be far easier to enforce the civil penalties. Of course, the Bill's objective is to make it easier to prosecute or deal with offenders. I accept that. However, my concern is that we are not implementing the lorry ban fairly and sensibly.
	It is easy to persecute HGV drivers. Does it matter? Yes, it does. There is already a severe shortage of such drivers. Why should we make the job even less attractive? Is the Minister confident that we shall not encounter a logistical meltdown due to a lack of HGV drivers? And, on top of all the other difficulties of being an HGV driver, what will be the effect of the working time directive?
	I strongly support Clause 13. I believe that Clause 14 proves a little more difficult. The drafting of Clause 13 may be a little woolly and perhaps could be more carefully worded. It seems to apply to all roads in all circumstances. But we in this House have had the builders in. They have been rearranging Old Palace Yard. How would we feel if a utility company came in and tore up Old Palace Yard? Structurally the reinstatement would be sound but the yard's appearance would be ruined. That is what Clause 13 seeks to remedy.
	Is the Minister content with the principle of Clause 13? Does he agree that the drafting needs to be more precise? And, at some stage during the passage of the Bill, will he be in a position to suggest better drafting? That would be preferable to waiting for the next legislative opportunity, which invariably takes a very long time to occur.

Baroness Hamwee: My Lords, I, too, thank the noble Lord, Lord Graham of Edmonton, for introducing the Bill so comprehensively. I welcome the Bill in a number of respects. I welcome the relationship between the boroughs and Transport for London—a relationship which is not always easy but which is developing. I welcome the withdrawal of the petitions, which is enabling this legislation to go forward. And I very much welcome the decriminalisation which the Bill encompasses because I believe that the police have far more important things to do. Some tasks can be carried out by other authorities and other organisations. Keeping private traffic, freight and public transport flowing on our roads is to everyone's benefit. I put in parenthesis the thought that, if more is to be done by local authorities, I hope that the funding required to enable them to do it effectively will be available.
	We heard from the noble Lord, Lord Peyton of Yeovil, who always makes his points powerfully, what amounted to an attack on all 32 boroughs, the City of London and Transport for London. I believe that the attack is perhaps a little harsher than is needed to deal with what are undoubtedly major problems, such as holes in the road, the duration of such work and repetition—that is, the same roads being dug up again and again. I am fascinated at the prospect of keyhole surgery—a suggestion floated by the noble Lord, Lord Jenkin.
	Much of London's infrastructure under the roads is in a fragile state. One needs only to think of the sewerage and drainage systems. I suspect that we shall face major problems as that infrastructure collapses in different places. If it can be protected and repaired without the problems with which we are all familiar, that will be very good news.
	I do not imagine that the Minister will have any further news tonight about the extension of the lane rental pilots in Camden and Middlesbrough. However, if he has, I shall welcome it. The local authorities are queuing up to use the same sort of powers.
	I do not believe that the local authorities would have been hugely enthusiastic about abandoning Clauses 13 and 14; otherwise, the clauses would not have been included in the first place. I believe they have been withdrawn because of objections by the utilities. Certainly the relationship between local authorities, the highways authorities and the utilities is difficult. Many openings of the highways—I believe it is in the region of 80 per cent—are classed as emergencies by the utilities. Although they are required to give only two hours' notice, they often give more, but they do not have to do so if an emergency is involved. It is a very difficult situation.
	The noble Earl, Lord Attlee, referred to the standard of reinstatement. I agree that that is a problem. So often one sees a repair which then quickly begins to sink.
	There has been much talk about current issues in London. I use the term "issues" rather than "problems" deliberately. I do not want to go too far down a road which, in answer to a question from the noble Lord, Lord Peyton of Yeovil, the Minister described as turning this House into the urban district council of Westminster, or even a parish council. These are devolved matters.
	I believe that the Trafalgar Square scheme is a great success and will be a great benefit to the centre of London. Parts of it have still to be completed, but it has had an encouraging start. I hope that that will enable all of us to be confident that other schemes, such as Vauxhall Cross, will be completed successfully and on schedule. It is at present on schedule. We are all suffering currently but there is much to be gained.
	I doubt whether the Trafalgar Square scheme could have been a pilot scheme. But I agree with the noble Lord, Lord Peyton, on the question of consultation by Transport for London. While I do not agree with every particular of his speech, I believe that Transport for London needs to understand that consultation is difficult and has to be detailed. It is not simply a question of agreeing with whoever makes the last point. It is a dialogue and involves feedback. We all have much to learn about good consultation. The Cabinet Office has much to say on the subject. Some of us have also said quite a lot about it to the mayor.
	Some points raised may not relate to the Bill but I cannot resist responding to them. The noble Earl referred to the cost of cabs and to London becoming a most expensive city in which to operate. Because of the cost of congestion, London's business community supports congestion charging in order to make it less expensive. If congestion charging works successfully, the gains to the business community will be great.
	I have supported the lorry ban since its inception. I am sad that the provision does not cover the whole of London. There are many residential roads outside the ban. When I was a borough councillor, the main road running like a spine through my ward was, and still is, the South Circular Road. That is a residential road, although it also carries much heavy traffic. The provision is a licensing scheme not a ban. It allows for deliveries and, where necessary, for traffic to pass. I am not aware of applicants for licences being turned down on the basis that their case is not deserving. I believe that the scheme should be supported.
	The Bill provides for the sharing of information between different authorities. I understand the need, although I believe that the sharing of information should not be undertaken lightly. Civil liberty issues are involved which should not be ignored.
	I am not wholly convinced by the provisions about parking alongside dropped footways, although I am well aware that I have not devoted anything like the attention to the matter that the promoters of the Bill have done. In many parts of London front gardens are being turned into parking areas because of the difficulty of parking on-street. As a result, the street area outside is not, and will not be, available for parking and one tends to lose more than one parking space. In addition—I leave aside the environmental aspects—it tends to consolidate the view that one owns the road outside one's own house. We are all aware that that is not the case. By protecting dropped footways—I do not refer to those which enable pedestrians, wheelchair users, those with buggies and so on to cross junctions—we consolidate the view of many that they have an entitlement to park directly outside their homes.
	I welcome the provisions on removing items such as advertising boards deposited on the highway. They can be a danger to people who are not mobile or whose sight is not good. Noble Lords who have had experience at parochial level will know that these issues cause great concern. I wish the Bill a fair wind.

Viscount Astor: My Lords, I am grateful to the noble Lord, Lord Graham, for introducing the Bill and giving us a chance to debate it.
	As the noble Baroness said, the Bill gives powers to 32 boroughs, the City of London and Transport for London. It is not surprising that noble Lords have concentrated somewhat on Transport for London and the mayor. His transport policy does not encourage the free flow of transport, unlike the policies of most of the boroughs. It has the opposite effect. The mayor has altered the timing of 370 traffic lights.
	Like the noble Baroness, I remain convinced that the Trafalgar Square scheme will be an improvement. I am puzzled about what has occurred outside our own front door here. I agree with my noble friend Lord Peyton that consultation does not mean simply sending out documents: it also means taking note of and listening to the replies. However, in his usual charming way, I am sure the Minister will avoid either condoning or condemning the mayor and will say that it is a matter for him. I am never sure whether that is because the Government are afraid to condone or condemn him; perhaps it is both.
	Decriminalising sounds a nice idea but it means that it will be easier to collect fines and it probably lessens the burden of proof on those accused. It is an incentive for local authorities and those involved: they will keep the money. If at present one writes to complain about receiving a parking ticket from a local authority one gets short shrift. One has to go to an independent adjudicator. The Bill makes such provision for those who are fined. However, I believe that the provision will lessen the burden of proof. It will make it easier for local authorities and Transport for London to collect more money more quickly. We must ensure that the public are protected.
	Perhaps the Minister will clarify a point raised by my noble friends Lord Jenkin and Lord Peyton. Clauses 13 and 14 will be withdrawn because the Government intend to bring forward proposals. It would be helpful if the Minister can say what point the Government have reached in their considerations.
	I notice that the Bill gives power for camera enforcement in box junctions. If one is unlucky enough to be caught in a box junction and receives a summons—one can be caught entirely by surprise—will it be possible to see photographic evidence before one enters a plea? If I were told that last week I was caught in a box junction, I would not have a clue whether that was so.
	My noble friend Lord Attlee was concerned about night-time deliveries. I am involved in a business in the West End that has deliveries but I do not know whether they take place at night, but in case they do I declare that interest. Night-time deliveries in residential areas can cause difficulties, but in certain places they should be encouraged. Although the fines are changed by this Bill, is it right that there is no change to the system of permissions for night-time deliveries?
	Clause 7 gives powers to ask bailiffs or the Motor Insurers' Bureau whether they have information on a keeper of a vehicle not held by the DVLA. Is that a new power or do the police currently have such a power? Have the Government estimated how much money local authorities may receive from such a power? I presume that estimates have been made. I notice that the local authorities and Transport for London will be able to spend most of the money, and they will be able to spend it on supporting public transport investment, services and facilities. I am nervous of money coming in and there being no clear guidelines inside or outside the Bill on how that money may be spent. If money is collected from those who infringe the road transport policy in London, it should be put back into that sector rather than be lost in a large budget.
	Clause 10 extends the power for highway authorities to enforce the powers on all roads. I do not know what that means. Is that a radical change?
	Will the Minister comment on the progress of the Bill? I understand that it will go to an unopposed Committee, but it will not be concluded before the end of this Session. I understand that the Chairman of Committees will recommend that it is rolled over so it will go to the chairman of the Ways and Means Committee in another place. How will that procedure work and what will be the timing?
	The noble Baroness, Lady Hamwee, made a substantial speech on the Bill and on various other issues. She said that congestion charges will be welcomed by business in London. I have seen no evidence of that. If there is evidence I would appreciate her sending it to me.

Baroness Hamwee: My Lords, with the leave of the House, I shall happily send the noble Viscount the transcript of meetings with, among others, the CBI London region and the London chambers of commerce, on the subject.

Lord McIntosh of Haringey: My Lords, I shall confine my remarks to the Bill and to those matters that concern the Government rather than the promoters. It is incumbent on me to give the Government's view of the Bill.
	On a number of occasions officials have discussed the Bill's proposals with the promoters. Following the promoters' decision to withdraw Clauses 13 and 14 on street works, the Government have no objections in principle to the Bill, although we seek certain assurances about the way that the decriminalised enforcement powers will be used. We shall also want to raise some points of detail in Committee. I shall return to the issue of street works and Clauses 13 and 14 at the close of my remarks.
	As my noble friend Lord Graham has explained, the main purpose of the Bill is to give the London borough councils and Transport for London powers to facilitate the smoother operation of their roads, in particular by giving the authorities powers to enforce various road traffic and highways law contraventions. The Government agree that it is not a good use of limited police resources to expect them to enforce offences that are not directly related to road safety; for example, speeding. The Bill builds on the well-established London system of civil enforcement by the traffic authority of parking controls and bus lanes.
	It is right that road traffic and highway law contraventions should be properly enforced and that the enforcement system should be an effective deterrent to would-be offenders. It is also right that the relevant authorities should be discriminating in their use of enforcement powers and focus on the most serious problems. Over-zealous enforcement of minor infringements can easily bring the system into discredit and give credence to the idea that enforcement is being used as a means of raising revenue rather than dealing with serious problems.
	The new powers should be piloted before they are used generally and there needs to be guidance to ensure that enforcement authorities adopt a focused and reasonable approach. I look to my noble friend Lord Graham to give us a clear undertaking on those matters when he responds to the debate.
	In principle, the Government accept the decriminalisation proposal relating to the enforcement of the London lorry ban. By avoiding the need to pursue every offence through the courts, as at present, the proposal should significantly reduce the administrative burden on the courts, the enforcing authorities and defendants. In parallel with that proposal, work is in hand through the London sustainable distribution forum to review the current operation of the lorry ban in pursuit of the commitment to do so in the Mayor of London's transport strategy. The Government welcome the review. The lorry ban was introduced when, as the noble Earl, Lord Attlee, said, lorries were noisier than they are now and it is right to consider whether the present extent and operation of the ban strikes the right balance between protecting the environment and the need to reduce unnecessary burdens on commerce and industry. I would like the comments of the noble Baroness, Lady Hamwee, and the noble Earl, Lord Attlee, on the lorry ban to be communicated to the London Sustainable Distribution Forum.
	The noble Viscount, Lord Astor, asked whether there will be camera evidence of a box junction offence. The answer is yes, although for a box junction offence one would like to see a moving picture to see whether the car in front that you thought would move forward has moved. The noble Viscount, Lord Astor, also asked about details of vehicle keepers in relation to Clause 7. The DVLA may release information on registered keepers and vehicles to those, such as the police, who have a reasonable need for such information.
	The noble Lord, Lord Jenkin, made a very interesting speech, of great concern to the promoters, about new developments in technology as they affect street works. He made a point about "trenchless" technology. We are aware of the developments that he described and we are enthusiastic about the possibilities of the techniques available to utility companies, especially for renewing water and gas pipes. They will require fewer openings—rather than no openings—of the highway and cause less destruction, but they will be difficult to use in central London where there is a concentration of what is technically called apparatus—what I would call pipes, ducts and cables. We take seriously what he says.
	The Government did urge the promoters to withdraw Clauses 13 and 14, despite the fact that we are keen to reduce the disruption caused by street works—as evidenced by our support for the current lane rental pilots in Camden and Middlesbrough. We took lane rental powers in the Transport Act 2000—urged on by the noble Lord, Lord Peyton, who was a pioneer. The pilots started in March 2002 and, subject to their outcome, we would be prepared to roll out lane rental nationally. My answer to whether the pilots will be extended to other individual local authorities is that we are looking at going straight from Camden and Middlesbrough to national implementation.
	On Clause 13, we told the promoters that we have been actively pursuing other ways of improving the operation of street works. Among them is a new specification for backfilling trenches and reinstatement that came into force in July and a stronger inspection regime, which was introduced this month. We are not idle. There is a long way to go and I hope that the lane rental pilots work and have an effect.
	Clause 14 is about providing ducts. I am pleased that the department will be launching a study by the end of the year that will look not only at the idea represented by that clause but more widely. For example, it will examine how barriers to trench sharing can be reduced and its use encouraged. It will investigate ideas such as providing one large duct or tunnel that could carry all the services into a new development—so avoiding the need to dig up the road subsequently. It is better not to pursue Clause 14 but to deal with the matter at national level.
	Those remarks cover the principal matters raised in debate and to which it is appropriate for the Government to reply. I look forward to hearing my noble friend's response.

Lord Jenkin of Roding: My Lords, before the Minister sits down, I asked whether there is a statutory duty on local authorities to keep traffic moving. I am told that there is not. Is the Minister able to help us with that point?

Lord McIntosh of Haringey: My Lords, I believe that the noble Lord is referring to a national traffic authority. We believe that the present arrangements for keeping traffic moving provide the right balance between national and local interests. The Highways Agency is responsible for roads of strategic importance, which carry the bulk of goods vehicles, and it is right that they should be dealt with at national level. The roads in Greater London for which the Highways Agency is responsible are virtually confined to the stubs of the M1, M11, M4 and A3113 around Heathrow.
	In the course of devolution to London, we gave responsibility for strategic transport planning and co-ordination to the mayor and Transport for London. That was the will of Parliament. Some 96 per cent of roads in the country, including in London, are the responsibility of local authorities—which can best represent the interests of homeowners, shops and businesses, as well of road transport. The balance between those interests is and ought to be the responsibility of local authorities.

Lord Graham of Edmonton: My Lords, I am grateful to everyone who has taken part in the debate—particularly my noble friend the Minister, who has relieved me of a great deal of responsibility for providing answers to questions that were legitimately raised. I repeat my gratitude to my noble friend for taking on that burden.

Lord McIntosh of Haringey: My Lords, I beg my noble friend's pardon for interrupting, but there is one question to which he should not be expected to respond. I refer to the question of the noble Viscount, Lord Astor, about what happens next. My understanding is that the procedure for private Bills normally includes carry-over into the next Session. That will clearly happen in this case.

Lord Graham of Edmonton: After that carry-over, my Lords, I will carry on.
	The noble Lord, Lord Peyton, speaks with the voice of aggravation and experience and none of your Lordships would disagree with his comments about frustration. His great argument is that, it ain't what you do but the way that you do it. The way in which Transport for London consults with or takes note of the noble Lord and many others leaves something to be desired. I repeat the assurance that I gave the noble Lord before the debate. I will do everything possible to persuade the powers that be at Transport for London to take careful note and to consider how it can improve its procedures in such a way that the aggravation and frustration felt and voiced by the noble Lord are diminished.
	The noble Lord, Lord Jenkin, offered us the fascinating prospect of avoiding—albeit with difficulty and at a cost—some of the aggravations addressed by the Bill. The noble Baroness, Lady Hamwee, pointed out the current delicate state of life under the highway. She forecast major surgery, not keyhole surgery, if that matter is not dealt with—and I entirely agree.
	The noble Earl, Lord Attlee, referred to the lorry ban. When I sat in another place, I spoke on the environment. The lorry ban issue in the early 1980s was a child of the Greater London Council. Over the years, it has been under constant review. In general, people and businesses in London accept the environmental case for a lorry ban. However, nothing is perfect. I will try to ensure that the powers that be in another place and elsewhere are made aware of the need to take into account the noble Earl's points.
	As to Clauses 13 and 14, and without any further promises, whatever form the consultations take they will be the subject of debate, argument and possibly amendment in this House and elsewhere.
	As to evidence in relation to box junctions, I was once caught for speeding. The photograph that I obtained from the police was evidence that I was "bang to rights". The answer of course was in the negative—was that a pun?—and I could not dispute it. My noble friend's comments were certainly helpful.
	My noble friend said that clear guidelines are needed for the future and that pilot schemes need to be undertaken with care and reason. One does not want to jump from one situation to another too hastily or too far.
	I am grateful to the House for listening. If I have failed to answer any points, I say as Ministers sometimes do—I will ensure that an answer is sent.
	On Question, Bill read a second time, and committed to an Unopposed Bill Committee.

Enterprise Bill

Consideration of amendments on Report resumed.
	Clause 254 [Income payments order]:

Lord Hunt of Wirral: moved Amendment No. 275:
	Page 183, line 12, leave out from "effect" to end of line 18 and insert "which period may end after the discharge of the bankrupt"

Lord Hunt of Wirral: My Lords, during the advantage of the dinner break business, I chose to forgo the pleasures of dinner and retired to the Library to consider what the noble Lord, Lord McIntosh of Haringey, had said about personal bankruptcies. In dealing with a previous amendment he said that one had to take into account not only employment and level of debt but also a range of other factors when considering the impact of this legislation.
	I looked up what was referred to as "the level of debt". I find myself with some serious concerns about the way that debt is accumulating in the United Kingdom. I discovered that, thanks to the Bank of England, data have now been produced to show that British households are on course for record-breaking debts of £800 billion, making them the most indebted in Europe. It may well be that lower interest rates have caused an increase in borrowing and, on average, those with mortgages now have total loans of nearly £63,000 each. I am much more concerned that on average individuals have £1,500 outstanding on credit and store cards and £3,000 on other loans.
	I found a quotation in the Daily Telegraph of 5th October by Cesar Molinas, an economist at Merrill Lynch. He said:
	"This borrowing is a peculiar feature of the modern British economy and I suppose America too. British households are by far the most indebted in Euorope".
	The Minister will recall when we debated these issues previously that I said that one concern is that millions of people are now running up unsustainable debts.
	In the Telegraph there was also a quotation from Miranda Haines of the Citizens' Advice Bureau about debt. She stated:
	"It is growing all the time. We have seen a million new cases of people with debt problems in the last year, and that is up by half on five years ago".
	That is the background behind the concerns which have been expressed on all sides of the House about the bankruptcy provisions. Income payments orders are intended to ensure that bankrupts make an affordable contribution towards their debt from their income for up to three years. I believe—and many others share this belief—that there should be no limit on the length of time for which an income payments order or agreement may last. Surely, the court, or the trustee with the agreement of the bankrupt is best placed to consider, on a case-by-case basis, the appropriate period, whether lesser or greater than three years. I should have thought that that was particularly pertinent to cases in which a debtor is considered culpable for the bankruptcy and has sufficient ongoing income to make a more significant contribution to the bankruptcy fund.
	Equally, the amendments provide that the courts should also be empowered to link income payments with culpability when considering an application for a bankruptcy restrictions order.
	The Minister said that he would not accept the previous amendments that we tabled. I agreed to consider the position further in the light of the comments that he made. I hope that he might now accept these amendments which would go some way to ensuring that income payments orders are made more effective. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I intervene briefly in support of my noble friend. One must be very careful in seeking the balance. The Minister has referred to the balance. I accept the stricture that we must find the right balance. Bankrupts can recover, post-discharge, quite quickly. If they are able, post-discharge, to gain a great deal of assets—build up their assets—there is no reason why creditors should not obtain some redress from that. It is their misfortune that has provided the platform on which the bankrupt has started again.
	Therefore, when my noble friend raises these points about income payment orders and the timescale, it is important that there should be, preferably, no limit, but certainly not a three-year limit. So that for those who are able, like a Phoenix out of the ashes, to rise and do well, there should be an opportunity for those disadvantaged creditors of the first bankruptcy to recover some of their losses. Therefore, I very much support the point that my noble friend has been making.

Lord McIntosh of Haringey: My Lords, I was very interested to learn of the dinner-time researches of the noble Lord, Lord Hunt. While I was in the Chamber, he was clearly gainfully occupied. However, I have one or two figures to give to him on the subject. The figures come from the Centre for Economic and Business Research. Indeed, they are quoted in the research report which he cited in support of Amendment No. 266.
	The research carried out by the Centre for Economic and Business Research highlights the large differential in levels of borrowing in the United States and the United Kingdom. There are a number of statistics that show that consumers are coping well with debt levels in the United Kingdom. Work carried out by the CEBR on behalf of the Internet bank Egg, which was referred to in their research, shows that the debt to wealth ratio of average households has decreased from 17.8 per cent in 1992 to 14.9 per cent now. Furthermore, interest payments as a share of income are now 6.8 per cent as opposed to 11.1 per cent at their peak, average household income has almost doubled since 1988 and now the average household assets total £220,000 compared to average debts of £32,000.
	According to the Halifax, in March 1990, 41 per cent of a first time buyer's gross earnings went on mortgage payments. The figure is now 15 per cent.
	The Credit Card Research Group, whose work we also looked at in preparing a response to the Centre for Economic and Business Research, in April 2002 said:
	"Debt in the UK appears to be sustainable in the short term. Banks have been careful to avoid repeating the mistakes of the late 1980s and consumers are now much more savvy in seeking out the best deals. These factors have combined with a favourable economic climate to ensure that debt levels have, at the broadest level, remained manageable".
	In September 2002 it said that,
	"the growing dominance of debit cards suggests that cardholders are still, in the main, behaving sensibly and borrowing only what they can afford to repay".
	Nothing is permanent and all kinds of things can happen to the economy. But the conclusion I draw from the research on which the noble Lord, Lord Hunt, places such reliance is the opposite to that which he has drawn.

Lord Hunt of Wirral: My Lords, I am most grateful to the Minister for his response. My intention was not to demonstrate that the situation was worse than the research to which he referred states, but to state that the level of debt must cause us concern when we are undergoing such fundamental changes in the law of bankruptcy. I repeat again what citizens advice bureaux state, which I have not heard him challenge:
	"We have seen a million new cases of people with debt problems in the last year, and that is up by half on five years ago".
	Citizens advice bureaux are a reliable source. I simply attempt to highlight problems that may well arise in future if we proceed down the route advocated by the Minister.

Lord McIntosh of Haringey: My Lords, I have huge respect for citizens advice bureaux, but they do not undertake research, they analyse the problems of those who come to them—it is good that they do.
	Amendments Nos. 275 to 277 are similar to amendments tabled by the Opposition both in Committee here and in the other place. They would provide that an income payments order or agreement were subject to no maximum time limit. It is right that those bankrupts who are able to make contributions from their income towards their debts should be required to do so under the new proposals—as they are under the existing regime. We all agree on that.
	Indeed, the introduction of the out-of-court route—that is, income payments agreements—will make that easier to achieve and will lead to increased returns to creditors. However, the three-year maximum recognises that there is a balance to be struck—I can always be teased on that, but it is still true—between the benefits that that will bring to the bankrupt's creditors and the rehabilitation of the individual concerned. To remove the maximum period for income payments orders and agreements would impose a much more stringent regime than is now the case. That would be both unfair and inconsistent with the aim of the proposals.
	The proposals in Clauses 254 and 255 provide further comfort to creditors by allowing for the variation of the income payments order or agreement, whether before or after discharge. That will enable any increase in the bankrupt's surplus income, to which the noble Lord, Lord Hodgson of Astley Abbots, referred, after the income payments order or agreement has been entered into to be taken into account.
	Amendment No. 278, however, stands in the name of both the Opposition and the Government. It is always a pleasure to see that. It is identical to an amendment tabled in Committee by the noble Lord, Lord Hodgson—for which I pay tribute to him. It ensures that any agreement for variation of an income payments agreement will be in writing. It has considerable merit because, if such a variation were agreed verbally, it might be open to later dispute. So the amendment appears before us standing in all our names and I thank the noble Lord for highlighting the matter. However, I must oppose Amendments Nos. 275 to 277.

Lord Hodgson of Astley Abbotts: My Lords, I thank the Minister for accepting Amendment No. 278, which was tabled in an attempt to avoid future problems.

Lord Hunt of Wirral: My Lords, perhaps I may join my noble friend in thanking the Minister and say that the Government's habit of adding their name to our amendments is one that we seek to encourage. Indeed, much of today's debate could have been avoided if they had only adopted that practice more widely. However, in the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 276 and 277 not moved.]

Lord Ampthill: My Lords, we come to Amendment No. 278, which is certainly a duet, possibly a trio and may even be a quartet. Who cares to move it?

Lord Hunt of Wirral: moved Amendment No. 278:
	Page 184, line 8, after "by" insert "written"

Lord Hunt of Wirral: My Lords, let us all move it. I beg to move.

On Question, amendment agreed to.
	[Amendment No. 279 had been withdrawn from the Marshalled List.]

Lord McIntosh of Haringey: moved Amendment No. 280:
	Page 184, line 24, leave out "bankrupt's sole or principal residence" and insert "sole or principal residence of—
	(a) the bankrupt,
	(b) the bankrupt's spouse, or
	(c) a former spouse of the bankrupt."

Lord McIntosh of Haringey: In moving the amendment, I shall speak also to Amendments Nos. 281 to 285. We are close to adding our name to opposition amendments, because our amendments are similar to amendments proposed in Committee—Amendments Nos. 373 to 378. The noble Lords, Lord Freeman and Lord Kingsland, spoke about what the noble Lord, Lord Freeman, called the "deserted wife's charter". My noble friend Lord Sainsbury undertook further to consider the matter, has done so and has tabled Amendments Nos. 280, 283 and 284.
	Amendment No. 280 extends the provisions of new Section 283A to ensure that any interest that the bankrupt has in the dwelling house of the spouse or former spouse must be dealt with within three years, otherwise the interest re-vests in the bankrupt. Without the amendment, the position would remain as it is, allowing the trustee to realise the bankrupt's interest in a dwelling house occupied by his spouse or former spouse at any time—possibly many years after the date of the bankruptcy.
	Amendment No. 284 extends the transitional provision in Clause 256(8) to the bankrupt's interest in the dwelling house of a spouse or former spouse that is their sole or principal residence, so that at the end of three years from the date on which new Section 283A comes into force, if such an interest has not been dealt with by the trustee or otherwise within that three years, such an interest re-vests in the bankrupt.
	Amendment No. 283 extends the provisions of new Section 313A, so that the bankrupt's interest in such a dwelling house is re-vested if the trustee applies for an order for sale or possession or a charging order, where the value of the interest is below the prescribed amount.
	Government Amendment No. 285 is similar to a previous amendment, Amendment No. 286—it gets confusing when amendment numbers, clause numbers and previous amendment numbers overlap; with the exception of the noble Lord, the Deputy Speaker, we will all get into terrible trouble—tabled in Committee. In Committee, that amendment was withdrawn because we wanted to consider the matter further and table our amendment, which we have done. Amendment No. 285 replaces the Bill's current provision for new Section 283A(10) and instead provides that subsections (4) to (9) of Section 283A apply to bankruptcy cases in existence prior to the coming into force of that section where the bankrupt has an interest in a dwelling house that is the sole or principal residence of himself, his spouse or former spouse.
	Therefore, where an application by the trustee to deal with such an interest in one such case is dismissed, the interest will re-vest in the bankrupt. If the bankrupt does not reveal an interest in one case, the three-year time limit will not commence until he does so. The provisions relating to the rules also apply.
	Government Amendments Nos. 281 and 282 reflect the policy intention behind the family home provisions in the Bill to ensure that the bankrupt's interest in the family home is dealt with within three years of the bankruptcy and in an equitable way. One way in which that interest can be dealt with is through Section 313 of the Insolvency Act 1986, which allows the trustee to create a charge against the bankrupt's home. The intention behind the amendments to Section 313 is to freeze the value of the bankrupt's interest—except for interest—so that the trustee is not tempted automatically to use a charging order to avoid having to deal with any property and to give the bankrupt some recognition if he has paid his mortgage and sells his home in future.
	Section 313 interacts with Section 3(5) of the Charging Orders Act 1979, which allows for the charging order to be varied. That provision might be used to vary the value of the interest specified in the charging order, which would defeat the policy intention of freezing the value of the bankrupt's interest in the family home. To ensure that that policy intention is fulfilled, the amendments make it clear that Section 3(5) of the Charging Orders Act 1979 may not be used to vary a charge against a bankrupt's home. I beg to move.

Lord Kingsland: My Lords, as the evening wears on, a harmonious relationship is beginning to emerge between the Government and the Opposition—which I applaud. I think that I am right in saying that all of the amendments that the Government have adopted, to a greater or lesser extent, reflect amendments that we tabled in Committee.
	The Minister is correct to say, in relation to Amendment No. 286, that in Committee I raised the point about the bankrupt's failure to inform the trustee or official receiver of his interest in a property. The noble Lord, Lord Sainsbury, said that the amendment clearly had some merit, that he was pleased that it had been tabled and that he would go away to think about it. Encouraged by that, I tabled an improved version but, if I understand the Minister's interpretation of his amendment correctly, mine is now surplus to requirements.
	In those circumstances, I repeat my thanks and shall sit down.

On Question, amendment agreed to.

Lord McIntosh of Haringey: moved Amendments Nos. 281 to 285:
	Page 185, line 39, leave out "and"
	Page 186, line 3, at end insert ", and
	(c) at the end insert—
	"(5) But an order under section 3(5) of that Act may not vary a charged value."" Page 186, line 9, leave out "bankrupt's sole or principal residence," and insert "sole or principal residence of—
	(i) the bankrupt,
	(ii) the bankrupt's spouse, or
	(iii) a former spouse of the bankrupt," Page 186, line 36, leave out "his sole or principal residence," and insert "the sole or principal residence of him, his spouse or a former spouse of his,"
	Page 187, line 1, leave out subsection (10) and insert—
	"(10) Subsections 283A(4) to (9) of that Act shall have effect, with any necessary modifications, in relation to the provision made by subsections (7) to (9) above; in particular—
	(a) a reference to the period mentioned in section 283A(2) shall be construed as a reference to the transitional period,
	(b) in the application of section 283A(5) a reference to the date of the bankruptcy shall be construed as a reference to the date on which subsection (1) above comes into force, and
	(c) a reference to the rules is a reference to rules made under section 412 of the Insolvency Act 1986 (c. 45) (for which purpose this section shall be treated as forming part of Parts VIII to XI of that Act)."
	On Question, amendments agreed to.
	[Amendment No. 286 not moved.]
	Clause 263 [Disqualification from office: general]:

Lord McIntosh of Haringey: moved Amendment No. 287:
	Page 189, line 26, at end insert—
	"( ) In subsection (2) the reference to a provision which disqualifies a person conditionally includes a reference to a provision which enables him to be dismissed."

Lord McIntosh of Haringey: My Lords, Amendment No. 287 is a clarifying amendment and sets out that a "disqualification provision" provided for in Clause 263(2) includes a reference to a provision which enables a person to be dismissed from office on being made bankrupt. It was thought that it was not sufficiently clear that dismissal currently falls within subsection (2) as drafted.
	It gives the power to amend any legislation which provides for dismissal on a person becoming bankrupt. For example, it would enable such a provision to be amended so that dismissal could result from the making of a bankruptcy restrictions order rather than simply the making of a bankruptcy order. I beg to move.

On Question, amendment agreed to.

Lord Hodgson of Astley Abbotts: moved Amendment No. 288:
	After Clause 267, insert the following new clause—
	"Subordinate Legislation (Part XV, Insolvency Act 1986)
	(1) In section 412(3) of the Insolvency Act 1986, leave out "subject to annulment in pursuance of a resolution of either" and insert "a draft of which must have been laid before and approved by resolution of each".
	(2) In section 418(3) of the Insolvency Act 1986, leave out "subject to annulment in pursuance of a resolution of either" and insert "a draft of which must have been laid before and approved by resolution of each"."

Lord Hodgson of Astley Abbotts: My Lords, as many noble Lords have remarked as the Bill has passed through the House, this is a monster bill. Equally, it is only a skeleton so far—there is much flesh to be put on the bones by means of statutory instruments. Details of those will be critical to the working of the Bill, or the Act, because conflicting claims and interests have to be balanced. We have seen that earlier today and on previous occasions.
	As I understand it, Clauses 251 to 256 and Schedules 19, 20 and 21 of the Enterprise Bill amend Part IX of the Insolvency Act 1986. Delegated legislation under Part IX of that Act is subject to the negative resolution procedure according to Part XV of the 1986 Act. Given that maintenance of proper standards of personal and corporate financial behaviour is an essential part of maintaining confidence in the free market economy, the rules must be given the maximum possible ventilation so that they are discussed and dealt with as appropriate.
	Therefore, I do not believe that it is right they should be subject only to the negative procedure. Given the importance of the rules, that is not appropriate, as evidenced by a number of our debates today. The amendment seeks to insert a clause to reverse that and requires the rules to be dealt with by the affirmative procedure. I beg to move.

Lord McIntosh of Haringey: My Lords, I agree that it is of great importance that we should maintain proper standards. If that were the subject matter of this part of the Bill, I would strongly support the noble Lord, Lord Hodgson. I am afraid that I have to tell him it is not.
	The first power in Section 412 of the Insolvency Act 1986 allows the Lord Chancellor, in agreement with the Secretary of State, to make rules giving effect to the bankruptcy provisions contained in that Act. Those words, "giving effect to" are important in terms of restricting how the power can be used. They mean that the power can be used only to put flesh on the bones of the primary legislation, not to alter it.
	For instance, the Act may say that a meeting of creditors should be called and what its purpose is. The power then allows rules to be made setting out where it should be held, who should be the chairman, who could come and vote, and so on. That is what a negative resolution procedure is about.
	That does not mean that the Government can bring forward rules without giving careful thought to their content. Under Section 413 of the Insolvency Act 1986, the Lord Chancellor must consult the Insolvency Rules Committee before making any rules. That is a knowledgeable committee, chaired by a High Court judge—Mr Justice Evans-Lombe—and made up of individuals with a considerable understanding of insolvency law and practice. One of the committee's key functions is to ensure that rules work properly in practice. It has been in place since 1976 and has the confidence of all parties involved in insolvency. In light of the scrutiny of the rules by the Select Committee, it is the Government's view that it is not necessary to change the current arrangements for parliamentary consideration of the rules.
	Section 418 allows the Secretary of State to set certain monetary values in the Act. For example, the financial parameters for deciding what is a small bankruptcy for the purpose of Section 273. That power provides an important flexibility allowing for the increase or decrease of monetary sums in the Act to take account of changing factors in future years, which indicate that the existing financial limits are no longer set at the appropriate level. Those are matters that require debate only if there are concerns that the Secretary of State has got it wrong. Section 418 provides for such circumstances because any order setting monetary limits under the section is subject to the negative resolution procedure.
	Neither of the powers referred to in the amendment allow the Lord Chancellor or the Secretary of State to replace, add to, or detract from the primary legislative provisions of that Act. Both are entirely normal procedures—not what is often called a Henry VIII power. If matters such as this had to come before Parliament on a regular basis, it would severely affect our ability to get things done. I urge the noble Lord, Lord Hodgson, not to press this amendment.

Lord Hodgson of Astley Abbotts: My Lords, I am getting into deep legal water. I am grateful to the Minister for his assurances of the importance of preserving the appropriate fabric and that those powers cannot be unduly altered. Following his assurances concerning the consultation that has taken place and the assurances that the Government have been given, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.
	Schedule 24 [Transitional and transitory provisions and savings]:

Lord McIntosh of Haringey: moved Amendment No. 289:
	Page 326, line 23, at end insert—
	"(2) The Secretary of State may treat any consultation carried out with the President of the Competition Commission Appeal Tribunals (before the appointment of the President of the Competition Appeal Tribunal) as being as effective for the purposes of section 15(1) as if it had been carried out with the President of the Competition Appeal Tribunal."

Lord McIntosh of Haringey: My Lords, this is a large set of government amendments to the transitional, consequential and repeal schedules. Perhaps I may deal first with sectoral enactment. The vast majority are consequential amendments to various sectoral enactments—the electricity Acts, the gas Acts, the airports Acts and so on. These enactments incorporate a mechanism whereby licence modifications proposed by the relevant regulator, but disputed by the licensee, can be referred to the Competition Commission. References currently rely on procedural provisions in the Fair Trading Act and the Competition Act 1998 which are being modified by the Enterprise Bill. The relevant provisions include time limits for reference inquiries, the voting rules for reporting panels, and the information-gathering powers available to the commission. A consequence of the Enterprise Bill is that these procedures have to be inserted into the various sectoral enactments as stand-alone provisions.
	The necessary amendments to the Telecommunications and Broadcasting Acts were made at an earlier stage in the passage of the Bill. My noble friend Lord Sainsbury said in Committee that they provided a template for consequential amendments that will be required to the other utilities Acts that are similarly affected. They have been well flagged and they should not cause the House any difficulty.
	There are a handful of other amendments in the group. Amendments Nos. 303 and 304 will have the effect of including a reference to the Office of Fair Trading as one of the bodies which has power to take remedial action under one or more of the sections of the Enterprise Act which are to be specified in Section 144 of the Copyright, Designs and Patents Act 1988 by virtue of paragraph 18 of Schedule 25. This corrects a technical omission.
	Amendment No. 305 will amend Section 238 of the Copyright, Designs and Patents Act 1988. It will make identical provision to that made by paragraph 18 of Schedule 25 with regard to copyright, but with regard to design rights.
	Amendments Nos. 295 and 297 repeal provisions in the Consumer Credit Act 1974 and the Estate Agents Act 1979 which require local weights and measures authorities in England and Wales to give the Director-General of Fair Trading notice of their intention to start proceedings for an offence under those Acts and not to institute proceedings for 28 days or until the director has notified them of receipt of the notice. These provisions will be reinstated with modifications by including both Acts in the legislation to be listed in the order to be made under Clause 225.
	Amendments Nos. 326 and 327 add the repeals referred to in Amendments Nos. 295 and 297 to Schedule 26. Amendment No. 289 is required to allow the Secretary of State to fulfil the consultation requirements imposed by Clause 15 prior to making the rules of the Competition Appeal Tribunal.
	Amendments Nos. 292 and 293 are required to ensure that the records of the new competition service are treated as public records under the Public Records Act 1958. This brings the service into line with other competition authorities. I beg to move.

On Question, amendment agreed to.
	Clause 272 [Power to make consequential amendments etc.]:

Lord Kingsland: moved Amendment No. 289A:
	Page 193, line 26, at end insert—
	"excepting that no order made under this section may amend or alter or in any way affect Part 6"

Lord Kingsland: My Lords, telegraphically, the amendment refers to the,
	"Power to make consequential amendments etc.",
	under the Bill. The power is granted under Clause 272. We seek to exclude Part 6 of the Bill from the scope of the clause. Part 6 deals with the cartel offence; that is the offence which has criminal consequences. We believe it inappropriate for a power such as that contained in Clause 272 to affect criminal provisions. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I have an amendment in this group. It is another crack at the point I made previously, but from a slightly different angle. As my noble friend said, Clause 272 deals with power to make consequential amendments. Subsection (2)(b) provides that an order under the clause may,
	"make incidental, supplementary, consequential, transitional, transitory or saving provision",
	as the Secretary of State may think appropriate under subsection (2)(1). I believe that they should therefore be subject to the affirmative procedure and the arguments I advanced in relation to Amendment No. 288 I advance again. However, I shall not weary the Minister by repeating them.

Lord McIntosh of Haringey: My Lords, the telegraphic reply would be that both provisions have been approved by the Delegated Powers and Regulatory Reform Committee. We rely on that, as the Commons say, with regard to an amendment coming from this House which affects privilege. However, I shall argue the case.
	The effect of Amendment No. 289 would make it impossible to use the consequential amendments power in Clause 272 to amend the cartel offences. If it were true that the power could be used to make substantive changes to Part 6, then I agree that there would be cause for concern. The power can be used only to supplement or make incidental or consequential provision and for the limited purposes given in subsection (1); namely, for the purposes of the Bill and in consequence of, or to give effect to its terms. The power would absolutely not permit the wholesale re-writing of substantive parts of the Bill.
	Contrary to what the noble Lord, Lord Kingsland, has said, it would not be possible to make substantive changes to Part 6. It would not, for example, be possible to use the power to change the definition of the cartels offence; nor would it be possible to increase the penalties for the offence or to introduce any new investigative powers.
	Amendment No. 290 would introduce an unnecessary degree of parliamentary oversight over the use of a power which is a standard feature of all pieces of legislation where, as here, there are close and complex interactions with other statutes. Clause 272 simply provides the flexiblity to make, by delegated legislation, any minor revisions to legislation that are required to ensure that the provisions of the Bill fit well with the provisions of other legislation. Examples of the type of amendments that may be made can be found in Schedule 25. In a Bill of this complexity, covering a number of policy areas, it is an entirely sensible provision.

Lord Hodgson of Astley Abbotts: My Lords, will the Minister give way? The Bill does not use the word "minor"; it says that,
	"The Secretary of State may . . . make such . . . provisions . . . as he considers appropriate".

Lord McIntosh of Haringey: Yes, my Lords, but it is all constrained by the very severe limitations that exist in Clause 272. Of course, the Secretary of State has to think it appropriate or he would not be putting it forward, however minor it is.
	The fundamental point is that this has been examined by the Delegated Powers and Regulatory Reform Committee and the committee considers the powers in the Bill to be appropriate. I oppose these amendments.

Lord Kingsland: My Lords, I thank the Minister for his response, which I find at least partially reassuring. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 290 not moved.]
	Schedule 25 [Minor and consequential amendments]:

Lord McIntosh of Haringey: moved Amendments Nos. 291 to 325:
	Page 332, line 31, at end insert—
	"(5A) References in this section to the Competition Commission shall, in cases where section 72(2) of the Enterprise Act 2002 applies, be read as references to the Office of Fair Trading." . Page 334, line 12, after first "of" insert "the Table at the end of paragraph 3 of"
	Page 334, leave out line 15 and insert—
	"(b) the following entries are inserted at the appropriate places—
	"Competition Service"" Page 334, line 42, after "1984" insert "or section 44B of the Airports Act 1986"
	Page 337, line 37, at end insert—
	"( ) subsection (2) (requirement to notify Director of intended prosecution) is omitted" Page 339, line 19, at end insert—
	"(4A) References in this section to the Competition Commission shall, in cases where section 72(2) of the Enterprise Act 2002 applies, be read as references to the Office of Fair Trading." . Page 341, line 4, at end insert—
	"( ) subsection (2) (requirement to notify Director of intended prosecution) is omitted" Page 342, line 43, leave out from "if" to end of line 2 on page 343 and insert "—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted." Page 349, line 15, leave out from "if" to end of line 17 and insert "—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted." Page 351, line 7, at end insert—
	"(1A) In section 44 (supplementary provisions relating to references to Commission), subsections (3) and (3A) shall cease to have effect.
	(1B) After section 44 there is inserted—
	"44A REFERENCES UNDER SECTION 43: TIME LIMITS
	(1) Every reference under section 43 shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Commission on a reference under section 43 shall not have effect (and no action shall be taken in relation to it under section 46) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the CAA under subsection (3).
	(3) The CAA may, if it has received representations on the subject from the Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) in relation to the same reference.
	(5) The CAA shall, in the case of an extension made by it under subsection (3)—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under paragraph (a) to the airport operator concerned and the Secretary of State.
	44B REFERENCES UNDER SECTION 43: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3), for the purposes of references under section 43 as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1), have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1), have effect in relation to those sections as applied by virtue of that subsection.
	(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection."
	(1C) In section 45 (reports on references)—
	(a) after subsection (2) there is inserted—
	"(2A) For the purposes of section 46(2), a conclusion contained in a report of the Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(2B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 43 as the conclusions of the Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (4) there is substituted—
	"(4) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Commission on a reference under section 43.
	(4A) In making any report on a reference under section 43 the Commission must have regard to the following considerations before disclosing any information.
	(4B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Commission thinks is contrary to the public interest.
	(4C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Commission thinks might significantly harm the individual's interests.
	(4D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4C)(a) or (b) is necessary for the purposes of the report." Page 351, line 27, at end insert—
	"(2A) In section 24 (licence modification references to Commission)—
	(a) subsections (7) and (7A) shall cease to have effect;
	(b) in subsection (8), after "sections" there is inserted "24A,".
	(2B) After section 24 there is inserted—
	"24A REFERENCES UNDER SECTION 24: TIME LIMITS
	(1) Every reference under section 24 above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 24 above shall not have effect (and no action shall be taken in relation to it under section 26 below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Authority under subsection (3) below.
	(3) The Authority may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
	(5) The Authority shall, in the case of an extension made by it under subsection (3) above—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under paragraph (a) above to the holder of the licence or, as the case may be, the relevant licence holders.
	24B REFERENCES UNDER SECTION 24: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 24 above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) above, have effect in relation to those sections as applied by virtue of that subsection.
	(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection."
	(2C) In section 25 (reports on licence modification references)—
	(a) after subsection (1) there is inserted—
	"(1A) For the purposes of sections 26 and 26A below, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 24 above as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (3) there is substituted—
	"(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 24 above.
	(3A) In making any report on a reference under section 24 above the Competition Commission must have regard to the following considerations before disclosing any information.
	(3B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(3C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(3D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (3C)(a) or (b) above is necessary for the purposes of the report."
	(2D) In section 26A (Commission's power to veto modifications following report)—
	(a) after subsection (11) there is inserted—
	"(11A) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under subsection (4)(a), (6) or (8).
	(11B) In giving any notice under subsection (4)(a) or (6), or publishing any notice under subsection (8), the Commission must have regard to the following considerations before disclosing any information.
	(11C) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Commission thinks is contrary to the public interest.
	(11D) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Commission thinks might significantly harm the individual's interests.
	(11E) The third consideration is the extent to which the disclosure of the information mentioned in subsection (11D)(a) or (b) is necessary for the purposes of the notice.
	(11F) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (11G) and (11H), for the purposes of any investigation by the Commission for the purposes of the exercise of its functions under this section, as they apply for the purposes of any investigation on references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(11G) Section 107 shall, in its application by virtue of subsection (11F), have effect as if—
	(a) subsection (2) were omitted;
	(b) in subsection (4), for the words "the publication of the report of the Commission on the reference concerned" there were substituted "the publication by the Commission of a notice under section 26A(8) of the Gas Act 1986 in connection with the reference concerned or, if no direction has been given by the Commission under section 26A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period"; and
	(c) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(11H) Section 108(5)(b) shall, in its application by virtue of subsection (11F), have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which a notice is published by the Commission under section 26A(8) of the Gas Act 1986 in connection with the reference concerned or, if no direction is given by the Commission under section 26A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.".
	(11I) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (11F) above, have effect in relation to those sections as applied by virtue of that subsection.
	(11J) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection.";
	(b) subsections (12) and (13) shall cease to have effect." Page 352, line 7, at end insert—
	"(6A) In section 41E (references to Commission about activities which are not licensable), subsections (7) and (8) shall cease to have effect.
	(6B) After section 41E there is inserted—
	"41EA REFERENCES UNDER SECTION 41E: TIME LIMITS
	(1) Every reference under section 41E above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 41E above shall not have effect (in particular for the purposes of section 41D(5) above) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Authority under subsection (3) below.
	(3) The Authority may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
	(5) The Authority shall publish an extension under subsection (3) above in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.
	41EB References under section 41E: application of Enterprise Act 2002
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 41E above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with references under section 41E above as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) or (4) above, have effect in relation to those sections as applied by virtue of those subsections.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."
	(6C) In section 41F (reports on references under section 41E)—
	(a) after subsection (3) there is inserted—
	"(3A) For the purposes of section 41D(5), a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(3B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 41E as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (4) there is substituted—
	"(4) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 41E.
	(4A) In making any report on a reference under section 41E the Competition Commission must have regard to the following considerations before disclosing any information.
	(4B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(4C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(4D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4C)(a) or (b) is necessary for the purposes of the report." Page 352, line 29, after "State" insert ", the Office of Fair Trading"
	Page 353, line 9, after "State" insert ", the Office of Fair Trading"
	Page 353, line 11, at end insert—
	"(4) In section 238 (powers exercisable for protection of the public interest), for subsections (1) and (2) there is substituted—
	"(1) Subsection (1A) applies where whatever needs to be remedied, mitigated or prevented by the Secretary of State, the Competition Commission or (as the case may be) the Office of Fair Trading under section 12(5) of the Competition Act 1980 or section 40(2), 54(2), 65(6), 72(2), 80(2), 133(2), 142(2) or 155(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following references to the Commission in connection with public bodies and certain other persons, mergers or market investigations etc.) consists of or includes—
	(a) conditions in licences granted by a design right owner restricting the use of the design by the licensee or the right of the design right owner to grant other licences, or
	(b) a refusal of a design right owner to grant licences on reasonable terms.
	(1A) The powers conferred by Schedule 8 to the Enterprise Act 2002 include power to cancel or modify those conditions and, instead or in addition, to provide that licences in respect of the design right shall be available as of right.
	(2) The references to anything permitted by Schedule 8 to the Enterprise Act 2002 in section 12(5A) of the Competition Act 1980 and in sections 72(4)(a), 80(4)(a), 81(2)(a), 86(1), 155(4)(a), 156(3)(a) and 159(1) of, and paragraphs 5, 10 and 11 of Schedule 7 to, the Act of 2002 shall be construed accordingly.".
	(5) In Schedule 2A, in paragraph 17 (powers exercisable in consequence of competition report)—
	(a) for sub-paragraphs (1) and (2) there is substituted—
	"(1) Sub-paragraph (1A) applies where whatever needs to be remedied, mitigated or prevented by the Secretary of State, the Competition Commission or (as the case may be) the Office of Fair Trading under section 12(5) of the Competition Act 1980 or section 40(2), 54(2), 65(6), 72(2), 80(2), 133(2), 142(2) or 155(2) of, or paragraph 5(2) or 10(2) of Schedule 7 to, the Enterprise Act 2002 (powers to take remedial action following references to the Commission in connection with public bodies and certain other persons, mergers or market investigations etc.) consists of or includes—
	(a) conditions in licences granted by the owner of a performer's property rights restricting the use to which a recording may be put by the licensee or the right of the owner to grant other licenses, or
	(b) a refusal of an owner of a performer's property rights to grant licences on reasonable terms.
	(1A) The powers conferred by Schedule 8 to the Enterprise Act 2002 include power to cancel or modify those conditions and, instead or in addition, to provide that licences in respect of the performer's property rights shall be available as of right.
	(2) The references to anything permitted by Schedule 8 to the Enterprise Act 2002 in section 12(5A) of the Competition Act 1980 and in sections 72(4)(a), 80(4)(a), 81(2)(a), 86(1), 155(4)(a), 156(3)(a) and 159(1) of, and paragraphs 5, 10 and 11 of Schedule 7 to, the Act of 2002 shall be construed accordingly.";
	(b) in sub-paragraph (3)—
	(i) for "A Minister" there is substituted "The Secretary of State, the Competition Commission or (as the case may be) the Office of Fair Trading";
	(ii) after "he" there is inserted "or it"." Page 353, line 23, at end insert—
	"(2A) In section 12 (licence modification references to Commission)—
	(a) in subsection (6A), after "sections" there is inserted "12A, ";
	(b) subsections (8) and (8A) shall cease to have effect.
	(2B) After section 12 there is inserted—
	"12A REFERENCES UNDER SECTION 12: TIME LIMITS
	(1) Every reference under section 12 above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 12 above shall not have effect (and no action shall be taken in relation to it under section 14 below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Authority under subsection (3) below.
	(3) The Authority may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
	(5) The Authority shall, in the case of an extension made by it under subsection (3) above—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under paragraph (a) above to the holder of the licence or, as the case may be, the relevant licence holders.
	12B REFERENCES UNDER SECTION 12: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 12 above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) above, have effect in relation to those sections as applied by virtue of that subsection.
	(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection."
	(2C) In section 13 (reports on licence modification references)—
	(a) after subsection (1) there is inserted—
	"(1A) For the purposes of sections 14 and 14A below, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 12 above as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (3) there is substituted—
	"(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 12 above.
	(3A) In making any report on a reference under section 12 above the Competition Commission must have regard to the following considerations before disclosing any information.
	(3B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(3C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(3D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (3C)(a) or (b) above is necessary for the purposes of the report."
	(2D) In section 14A (Commission's power to veto modifications following report)—
	(a) after subsection (11) there is inserted—
	"(11A) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under subsection (4)(a), (6) or (8).
	(11B) In giving any notice under subsection (4)(a) or (6), or publishing any notice under subsection (8), the Commission must have regard to the following considerations before disclosing any information.
	(11C) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Commission thinks is contrary to the public interest.
	(11D) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Commission thinks might significantly harm the individual's interests.
	(11E) The third consideration is the extent to which the disclosure of the information mentioned in subsection (11D)(a) or (b) is necessary for the purposes of the notice.
	(11F) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (11G) and (11H), for the purposes of any investigation by the Commission for the purposes of the exercise of its functions under this section, as they apply for the purposes of any investigation on references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(11G) Section 107 shall, in its application by virtue of subsection (11F), have effect as if—
	(a) subsection (2) were omitted;
	(b) in subsection (4), for the words "the publication of the report of the Commission on the reference concerned" there were substituted "the publication by the Commission of a notice under section 14A(8) of the Electricity Act 1989 in connection with the reference concerned or, if no direction has been given by the Commission under section 14A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period;" and
	(c) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(11H) Section 108(5)(b) shall, in its application by virtue of subsection (11F), have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which a notice is published by the Commission under section 14A(8) of the Electricity Act 1989 in connection with the reference concerned or, if no direction is given by the Commission under section 14A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.".
	(11I) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (11F) above, have effect in relation to those sections as applied by virtue of that subsection.
	(11J) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection.";
	(b) subsections (12) and (13) shall cease to have effect." Page 353, line 44, at end insert—
	"(7) In section 56C (references to Commission about activities which are not licensable), subsections (7) and (8) shall cease to have effect.
	(8) After section 56C there is inserted—
	"56CA REFERENCES UNDER SECTION 56C: TIME LIMITS
	(1) Every reference under section 56C above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 56C above shall not have effect (in particular for the purposes of section 56B(5) above) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Authority under subsection (3) below.
	(3) The Authority may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
	(5) The Authority shall publish an extension under subsection (3) above in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it.
	56CB References under section 56C: application of Enterprise Act 2002
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 56C above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with references under section 56C above as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) or (4) above, have effect in relation to those sections as applied by virtue of those subsections.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."
	(9) In section 56D (reports on references under section 56C)—
	(a) after subsection (3) there is inserted—
	"(3A) For the purposes of section 56B(5), a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(3B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 56C as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (4) there is substituted—
	"(4) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 56C.
	(4A) In making any report on a reference under section 56C the Competition Commission must have regard to the following considerations before disclosing any information.
	(4B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(4C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(4D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4C)(a) or (b) is necessary for the purposes of the report."" Page 354, line 30, at end insert ";
	(iv) sub-paragraph (5) shall cease to have effect;" Page 354, line 32, at end insert ";
	(ca) after paragraph 4 there is inserted—
	"Enforcement
	4A (1) The court may, on an application by the OFT, enquire into whether any person ("the defaulter") has refused or otherwise failed, without reasonable excuse, to comply with a notice under paragraph 4.
	(2) An application under sub-paragraph (1) shall include details of the possible failure which the OFT considers has occurred.
	(3) In enquiring into a case under sub-paragraph (1), the court shall hear any witness who may be produced against or on behalf of the defaulter and any statement which may be offered in defence.
	(4) Sub-paragraphs (5) and (6) apply where the court is satisfied, after hearing any witnesses and statements as mentioned in sub-paragraph (3), that the defaulter has refused or otherwise failed, without reasonable excuse, to comply with the notice under paragraph 4.
	(5) The court may punish the defaulter as it would have been able to punish him had he been guilty of contempt of court.
	(6) Where the defaulter is a body corporate, the court may punish any director or officer of the defaulter as it would have been able to punish that director or officer had the director or officer been guilty of contempt of court.
	(7) In this section "the court"—
	(a) in relation to England and Wales, means the High Court, and
	(b) in relation to Scotland, means the Court of Session.
	4B (1) A person commits an offence if he intentionally alters, suppresses or destroys a document which he has been required to produce by a notice under paragraph 4.
	(2) A person who commits an offence under sub-paragraph (1) shall be liable—
	(a) on summary conviction, to a fine not exceeding the statutory maximum;
	(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.";" Page 355, line 47, at end insert ";
	(c) subsection (3) shall cease to have effect.
	(4) After section 46 there is inserted—
	"46A ENFORCEMENT OF NOTICES UNDER SECTION 46
	(1) The High Court may, on an application by the OFT, enquire into whether any person ("the defaulter") has refused or otherwise failed, without reasonable excuse, to comply with a notice under section 46(1).
	(2) An application under subsection (1) shall include details of the possible failure which the OFT considers has occurred
	(3) In enquiring into a case under subsection (1), the High Court shall hear any witness who may be produced against or on behalf of the defaulter and any statement which may be offered in defence.
	(4) Subsections (5) and (6) apply where the High Court is satisfied, after hearing any witnesses and statements as mentioned in subsection (3), that the defaulter has refused or otherwise failed, without reasonable excuse, to comply with the notice under section 46(1).
	(5) The High Court may punish the defaulter as it would have been able to punish him had he been guilty of contempt of court.
	(6) Where the defaulter is a body corporate, the High Court may punish any director or officer of the defaulter as it would have been able to punish that director or officer had the director or officer been guilty of contempt of court.
	46B ALTERING, ETC. DOCUMENTS REQUIRED TO BE PRODUCED UNDER SECTION 46
	(1) A person commits an offence if he intentionally alters, suppresses or destroys a document which he has been required to produce by a notice under section 46(1).
	(2) A person who commits an offence under subsection (1) shall be liable—
	(a) on summary conviction, to a fine not exceeding the statutory maximum;
	(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both."" Page 360, line 18, leave out from "if" to end of line 21 and insert "—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted." Page 362, line 29, at end insert—
	"(2A) In section 12(5) (determinations under conditions of appointment) for "the 1973 Act" there is substituted "the Enterprise Act 2002".
	(2B) In section 14 (conditions of appointment: modification references to Commission), subsections (7) and (7A) shall cease to have effect.
	(2C) After section 14 there is inserted—
	"14A REFERENCES UNDER SECTION 14: TIME LIMITS
	(1) Every reference under section 14 above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 14 above shall not have effect (and no action shall be taken in relation to it under section 16 below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Director under subsection (3) below.
	(3) The Director may, if he has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
	(5) The Director shall, in the case of an extension made by him under subsection (3) above—
	(a) publish that extension in such manner as he considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by him under paragraph (a) above to the company whose appointment is mentioned in the reference.
	14B REFERENCES UNDER SECTION 14: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 14 above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) above, have effect in relation to those sections as applied by virtue of that subsection.
	(5) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of that subsection."
	(2D) In section 15 (reports on modification references)—
	(a) after subsection (1) there is inserted—
	"(1A) For the purposes of section 16 below, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 14 above as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (3) there is substituted—
	"(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 14 above.
	(3A) In making any report on a reference under section 14 above the Competition Commission must have regard to the following considerations before disclosing any information.
	(3B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(3C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(3D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (3C)(a) or (b) above is necessary for the purposes of the report."" Page 364, line 9, at end insert—
	"(1A) In Article 15 (licence modification references to Commission) paragraphs (8) and (8A) shall cease to have effect.
	(1B) After Article 15 there is inserted—
	"15A REFERENCES UNDER ARTICLE 15: TIME LIMITS
	(1) Every reference under Article 15 shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under Article 15 shall not have effect (and no action shall be taken in relation to it under Article 17) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Director under paragraph (3).
	(3) The Director may, if he has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under paragraph (3) in relation to the same reference.
	(5) The Director shall, in the case of an extension made by him under paragraph (3)—
	(a) publish that extension in such manner as he considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by him under sub-paragraph (a) to the licence holder.
	15B REFERENCES UNDER ARTICLE 15: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in paragraphs (2) and (3), for the purposes of references under Article 15 as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of paragraph (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of paragraph (1), have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of paragraph (1), have effect in relation to those sections as applied by virtue of that paragraph.
	(5) Accordingly, corresponding provisions of this Order shall not have effect in relation to those sections as applied by virtue of that paragraph."
	(1C) In Article 16 (reports on licence modification references)—
	(a) after paragraph (1) there is inserted—
	"(1A) For the purposes of Article 17, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under Article 15 as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for paragraph (3) there is substituted—
	"(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under Article 15.
	(3A) In making any report on a reference under Article 15 the Competition Commission must have regard to the following considerations before disclosing any information.
	(3B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(3C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(3D) The third consideration is the extent to which the disclosure of the information mentioned in paragraph (3C)(a) or (b) is necessary for the purposes of the report."" Page 365, line 15, at end insert—
	"(2A) In section 13 (licence modification references to Commission)—
	(a) in subsection (1A), after "section" in the first place where it appears there is inserted ", section 13A below";
	(b) subsections (8) and (8A) shall cease to have effect.
	(2B) After section 13 there is inserted—
	"13A References under section 13: time limits
	(1) Every reference under section 13 above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 13 above shall not have effect (and no action shall be taken in relation to it under section 15 below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the appropriate authority under subsection (3) below.
	(3) The appropriate authority may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) above in relation to the same reference.
	(5) The appropriate authority shall, in the case of an extension made by it under subsection (3) above—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under paragraph (a) above to the holder of the licence.
	13B References under section 13: application of Enterprise Act 2002
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3) below, for the purposes of references under section 13 above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with references under section 13 as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders), shall, for the purposes of the application of those sections by virtue of subsection (1) or (4) above, have effect in relation to those sections as applied by those subsections.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."
	(2C) In section 14 (reports on licence modification references)—
	(a) after subsection (1) there is inserted—
	"(1A) For the purposes of sections 15 to 15B below, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 13 above as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (3) there is substituted—
	"(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 13 above.
	(3A) In making any report on a reference under section 13 above the Competition Commission must have regard to the following considerations before disclosing any information.
	(3B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(3C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(3D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (3C)(a) or (b) above is necessary for the purposes of the report."
	(2D) In section 15C (provisions supplementary to Commission's power to veto modifications following report), for subsections (1) and (2) there is substituted—
	"(1) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under section 15A(4) or 15B(3) above.
	(2) In giving any notice under section 15A(4) or 15B(3) above, the Competition Commission must have regard to the following considerations before disclosing any information.
	(2A) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(2B) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(2C) The third consideration is the extent to which the disclosure of the information mentioned in subsection (2B)(a) or (b) above is necessary for the purposes of the notice.
	(2D) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2E) and (2F) below, for the purposes of any investigation by the Competition Commission for the purposes of the exercise of its functions under section 15A or 15B above, as they apply for the purposes of any investigation on references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2E) Section 107 shall, in its application by virtue of subsection (2D) above, have effect as if—
	(a) subsection (2) were omitted;
	(b) in subsection (4), for the words "the publication of the report of the Commission on the reference concerned" there were substituted "the sending of a copy to the Regulator under section 15B(5) of the Railways Act 1993 of the modifications made by the Commission in connection with the reference concerned or, if no direction has been given by the Commission under section 15A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period"; and
	(c) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(2F) Section 108(5)(b) shall, in its application by virtue of subsection (2D) above, have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which a copy of the modifications made by the Commission in connection with the reference concerned is sent to the Regulator under section 15B(5) of the Railways Act 1993 or, if no direction is given by the Commission under section 15A(1) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.".
	(2G) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with the exercise of its functions under section 15A and 15B above as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(2H) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (2D) or (2G) above, have effect in relation to those sections as applied by virtue of those subsections.
	(2I) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."" Page 365, line 42, at end insert—
	"(7A) In section 74(7) (annual and other reports of the Regulator), for "Section 125(1) of the 1973 Act (annual and other reports)" there is substituted "Paragraph 12A(1) of Schedule 7 to the Competition Act 1998 (annual reports of the Competition Commission)"." Page 366, line 11, at end insert—
	"(10) In Schedule 4A (review of access charges by Regulator)—
	(a) for paragraph 10 there is substituted—
	"References under paragraph 9: time limits
	10 (1) Every reference under paragraph 9 above shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under paragraph 9 above shall not have effect (and no action shall be taken in relation to it under paragraph 12 below) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Regulator under sub-paragraph (3) below.
	(3) The Regulator may, if he has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under sub-paragraph (3) above in relation to the same reference.
	(5) The Regulator shall, in the case of an extension made by him under sub-paragraph (3) above—
	(a) publish that extension in such manner as he considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by him under paragraph (a) above to the persons on whom a copy of the review notice was served.
	References under paragraph 9: application of Enterprise Act 2002
	10A (1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in sub-paragraphs (2) and (3) below, for the purposes of references under paragraph 9 above as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of sub-paragraph (1) above, have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of sub-paragraph (1) above, have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with references under paragraph 9 above as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of sub-paragraph (1) or (4) above, have effect in relation to those sections as applied by virtue of those sub-paragraphs.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those sub-paragraphs.";
	(b) in paragraph 11—
	(i) after sub-paragraph (4) there is inserted—
	"(4A) For the purposes of paragraphs 12 to 14 below, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(4B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under paragraph 9 above as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(ii) for sub-paragraph (5) there is substituted—
	"(5) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under paragraph 9 above.
	(5A) In making any report on a reference under paragraph 9 above the Competition Commission must have regard to the following considerations before disclosing any information.
	(5B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(5C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(5D) The third consideration is the extent to which the disclosure of the information mentioned in sub-paragraph (5C)(a) or (b) above is necessary for the purposes of the report.";
	(c) in paragraph 15, for sub-paragraphs (1) and (2) there is substituted—
	"(1) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under paragraph 13(4) or 14(3) above.
	(2) In giving any notice under paragraph 13(4) or 14(3) above, the Competition Commission must have regard to the following considerations before disclosing any information
	(2A) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(2B) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(2C) The third consideration is the extent to which the disclosure of the information mentioned in sub-paragraph (2B)(a) or (b) above is necessary for the purposes of the notice.
	(2D) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in sub-paragraphs (2E) and (2F) below, in relation to any investigation by the Competition Commission for the purposes of the exercise of its functions under paragraph 13 or 14 above, as they apply for the purposes of any investigation on references under that Part—
	(a) section 106 (attendance of witnesses and production of documents, etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2E) Section 107 shall, in its application by virtue of sub-paragraph (2D) above, have effect as if—
	(a) subsection (2) were omitted;
	(b) in subsection (4), for the words "the publication of the report of the Commission on the reference concerned" there were substituted "the sending of a copy to the Regulator under paragraph 14 of Schedule 4A to the Railways Act 1993 of the relevant changes made by the Commission in connection with the reference concerned or, if no direction has been given by the Commission under paragraph 13(1) of that Schedule to that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period"; and
	(c) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(2F) Section 108(5)(b) shall, in its application by virtue of sub-paragraph (2D) above, have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which a copy of the relevant changes made by the Commission in connection with the reference concerned is sent to the Regulator under paragraph 14 of Schedule 4A to the Railways Act 1993 or, if no direction is given by the Commission under paragraph 13(1) of that Schedule to that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.".
	(2G) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with the exercise of its functions under paragraph 13 or 14 above as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(2H) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of sub-paragraph (2D) or (2G) above, have effect in relation to those sections as applied by virtue of those sub-paragraphs.
	(2I) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those sub-paragraphs."" Page 367, line 2, at end insert—
	"(1A) In Article 35 (supplementary provisions relating to references to the Commission), paragraphs (3) and (3A) shall cease to have effect.
	(1B) After Article 35 there is inserted—
	"35A REFERENCES UNDER ARTICLE 34: TIME LIMITS
	(1) Every reference under Article 34 shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Commission on a reference under Article 34 shall not have effect (and no action shall be taken in relation to it under Article 37) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the CAA under paragraph (3).
	(3) The CAA may, if it has received representations on the subject from the Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under paragraph (3) in relation to the same reference.
	(5) The CAA shall, in the case of an extension made by it under paragraph (3)—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under sub-paragraph (a) to the airport operator concerned and the Department.
	35B REFERENCES UNDER ARTICLE 34: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in paragraphs (2) and (3), for the purposes of references under Article 34 as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of paragraph (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of paragraph (1), have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of paragraph (1), have effect in relation to those sections as applied by virtue of that paragraph.
	(5) Accordingly, corresponding provisions of this Order shall not have effect in relation to those sections as applied by virtue of that paragraph."
	(1C) In Article 36 (reports on references)—
	(a) after paragraph (2) there is inserted—
	"(2A) For the purposes of Article 37(2), a conclusion contained in a report of the Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(2B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under Article 34 as the conclusions of the Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for paragraph (4) there is substituted—
	"(4) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Commission on a reference under Article 34.
	(4A) In making any report on a reference under Article 34 the Commission must have regard to the following considerations before disclosing any information.
	(4B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Commission thinks is contrary to the public interest.
	(4C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Commission thinks might significantly harm the individual's interests.
	(4D) The third consideration is the extent to which the disclosure of the information mentioned in paragraph (4C)(a) or (b) is necessary for the purposes of the report."" Page 367, line 40, at end insert—
	"(1A) In Article 15 (licence modification references to Commission)—
	(a) paragraphs (9) and (9A) shall cease to have effect;
	(b) in paragraph (10), after "Articles" there is inserted "15A,".
	(1B) After Article 15 there is inserted—
	"15A REFERENCES UNDER ARTICLE 15: TIME LIMITS
	(1) Every reference under Article 15 shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under Article 15 shall not have effect (and no action shall be taken in relation to it under Article 17) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Director under paragraph (3).
	(3) The Director may, if he has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under paragraph (3) in relation to the same reference.
	(5) The Director shall, in the case of an extension made by him under paragraph (3)—
	(a) publish that extension in such manner as he considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by him under sub-paragraph (a) to the holder of the licence or, as the case may be, the relevant licence holders.
	15B REFERENCES UNDER ARTICLE 15: POWERS OF INVESTIGATION
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in paragraphs (2) and (3), for the purposes of references under Article 15 as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of paragraph (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of paragraph (1), have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 113 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of paragraph (1), have effect in relation to those sections as applied by virtue of that paragraph.
	(5) Accordingly, corresponding provisions of this Order shall not have effect in relation to those sections as applied by virtue of that paragraph."
	(1C) In Article 16 (reports on licence modification references)—
	(a) after paragraph (1) there is inserted—
	"(1A) For the purposes of Article 17, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under Article 15 as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for paragraph (3) there is substituted—
	"(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under Article 15.
	(3A) In making any report on a reference under Article 15 the Competition Commission must have regard to the following considerations before disclosing any information.
	(3B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(3C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(3D) The third consideration is the extent to which the disclosure of the information mentioned in paragraph (3C)(a) or (b) is necessary for the purposes of the report."" Page 368, line 26, at end insert—
	"(1A) In section 3(4)(b) (excluded agreements), for "the Fair Trading Act 1973" there is substituted "the Enterprise Act 2002"." Page 371, line 24, after "(regulators)" insert "—
	(a) in subsection (1), for the words from "any person" to the end of the subsection there is substituted "—
	(a) the Director General of Telecommunications;
	(b) the Gas and Electricity Markets Authority;
	(c) the Director General of Electricity Supply for Northern Ireland;
	(d) the Director General of Water Services;
	(e) the Rail Regulator;
	(f) the Director General of Gas for Northern Ireland; and
	(g) the Civil Aviation Authority.";
	(b)" Page 373, line 27, leave out from "enterprises" to end of line 35 and insert "of the kind to which that section applies"
	Page 376, line 29, at end insert ";
	(b) after paragraph 2 there is inserted—
	"Investigations under section 162: application of Enterprise Act 2002
	2A (1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in sub-paragraphs (2) and (3), for the purposes of any investigation by the Commission under section 162 of this Act as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of sub-paragraph (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b) shall, in its application by virtue of sub-paragraph (1), have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which the report of the Commission on the investigation concerned is made or, if the Commission decides not to make a report, the day on which the Commission makes the statement required by section 162(3) of the Financial Services and Markets Act 2000."
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Commission in connection with an investigation under section 162 of this Act as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of sub-paragraph (1) or (4) above, have effect in relation to those sections as applied by virtue of those sub-paragraphs.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those sub-paragraphs.
	Section 162: modification of Schedule 7 to the Competition Act 1998
	2B For the purposes of its application in relation to the function of the Commission of deciding in accordance with section 162(2) of this Act not to make a report, paragraph 15(7) of Schedule 7 to the Competition Act 1998 (power of the Chairman to act on his own while a group is being constituted) has effect as if, after paragraph (a), there were inserted "; or
	(aa) in the case of an investigation under section 162 of the Financial Services and Markets Act 2000, decide not to make a report in accordance with subsection (2) of that section (decision not to make a report where no useful purpose would be served)."
	Reports under section 162: further provision
	2C (1) For the purposes of section 163 of this Act, a conclusion contained in a report of the Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the investigation concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(2) If a member of a group so constituted disagrees with any conclusions contained in a report made under section 162 of this Act as the conclusions of the Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.
	(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Commission under section 162.";
	(c) paragraph 3 (applied provisions) shall cease to have effect." Page 376, line 43, at end insert—
	"(1A) After section 15 (licence modification references to Commission) there is inserted—
	"15A REFERENCES UNDER SECTION 15: TIME LIMITS
	(1) Every reference under section 15 shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 15 shall not have effect (and no action shall be taken in relation to it under section 17) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the Commission under subsection (3).
	(3) The Commission may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) in relation to the same reference.
	(5) The Commission shall, in the case of an extension made by it under subsection (3)—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under paragraph (a) to the licence holder and the Secretary of State.
	15B REFERENCES UNDER SECTION 15: APPLICATION OF ENTERPRISE ACT 2002
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3), for the purposes of references under section 15 as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1), have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with references under section 15 as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) or (4), have effect in relation to those sections as applied by virtue of those subsections.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."
	(1B) After section 16 (reports on licence modification references), there is inserted—
	"16A REPORTS ON REFERENCES UNDER SECTION 15: FURTHER PROVISION
	(1) For the purposes of sections 17 and 18, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(2) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 15 as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.
	(3) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 15.
	(4) In making any report on a reference under section 15 the Competition Commission must have regard to the following considerations before disclosing any information.
	(5) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest
	(6) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(7) The third consideration is the extent to which the disclosure of the information mentioned in subsection (6)(a) or (b) is necessary for the purposes of the report."
	(1C) After section 19 (procedural requirements in relation to modification) there is inserted—
	"19A SECTIONS 18 AND 19: FURTHER PROVISION
	(1) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under section 19(6) or (8).
	(2) In giving any notice under section 19(6) or (8), the Competition Commission must have regard to the following considerations before disclosing any information.
	(3) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(4) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(5) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4)(a) or (b) is necessary for the purposes of the notice.
	(6) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (7) and (8), in relation to any investigation by the Competition Commission for the purposes of the exercise of its functions under section 18 as they apply for the purposes of any investigation on references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(7) Section 107 shall, in its application by virtue of subsection (6), have effect as if—
	(a) subsection (2) were omitted;
	(b) in subsection (4), for the words from "the publication" to "reference concerned" there were substituted "the sending of a copy to the Secretary of State under section 19(11) of the Postal Services Act 2000 of the modifications made by the Competition Commission in connection with the reference concerned or, if no direction has been given by the Competition Commission under section 18(2) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period"; and
	(c) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(8) Section 108(5)(b) shall, in its application by virtue of subsection (6), have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which a copy of the modifications made by the Competition Commission in connection with the reference concerned is sent to the Secretary of State under section 19(11) of the Postal Services Act 2000 or, if no direction is given by the Competition Commission under section 18(2) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.".
	(9) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with the exercise of its functions under section 18 as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(10) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (6) or (9), have effect in relation to those sections as applied by virtue of those subsections.
	(11) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."
	(1D) Section 20 (application of competition legislation to references, etc.) shall cease to have effect." Page 377, line 10, at end insert—
	"(1A) In section 5(9) (annual and other reports of the Authority), for "Section 125(1) of the Fair Trading Act 1973 (annual and other reports)" there is substituted "Paragraph 12A(1) of Schedule 7 to the Competition Act 1998 (annual reports of the Competition Commission)"." Page 377, line 22, at end insert—
	"(1A) In section 12 (licence modification references to Commission), subsections (9), (10) and (11) shall cease to have effect.
	(1B) After section 12 there is inserted—
	"12A REFERENCES UNDER SECTION 12: TIME LIMITS
	(1) Every reference under section 12 shall specify a period (not longer than six months beginning with the date of the reference) within which a report on the reference is to be made.
	(2) A report of the Competition Commission on a reference under section 12 shall not have effect (and no action shall be taken in relation to it under section 14) unless the report is made before the end of the period specified in the reference or such further period (if any) as may be allowed by the CAA under subsection (3).
	(3) The CAA may, if it has received representations on the subject from the Competition Commission and is satisfied that there are special reasons why the report cannot be made within the period specified in the reference, extend that period by no more than six months.
	(4) No more than one extension is possible under subsection (3) in relation to the same reference.
	(5) The CAA shall, in the case of an extension made by it under subsection (3)—
	(a) publish that extension in such manner as it considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by it; and
	(b) send a copy of what has been published by it under paragraph (a) to the licence holder and the Secretary of State.
	12B References under section 12: application of Enterprise Act 2002
	(1) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (2) and (3), for the purposes of references under section 12 as they apply for the purposes of references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(2) Section 107 shall, in its application by virtue of subsection (1), have effect as if—
	(a) subsection (2) were omitted; and
	(b) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(3) Section 108(5)(b)(ii) shall, in its application by virtue of subsection (1), have effect as if—
	(a) for the words "published (or, in the case of a report under section 49 or 64, given)" there were substituted "made";
	(b) for the words "published (or given)", in both places where they appear, there were substituted "made"; and
	(c) the words "by this Part" were omitted.
	(4) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with references under section 12 as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(5) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (1) or (4), have effect in relation to those sections as applied by virtue of those subsections.
	(6) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections."
	(1C) In section 13 (reports on licence modification references)—
	(a) after subsection (1) there is inserted—
	"(1A) For the purposes of sections 14 to 17, a conclusion contained in a report of the Competition Commission is to be disregarded if the conclusion is not that of at least two-thirds of the members of the group constituted in connection with the reference concerned in pursuance of paragraph 15 of Schedule 7 to the Competition Act 1998.
	(1B) If a member of a group so constituted disagrees with any conclusions contained in a report made on a reference under section 12 as the conclusions of the Competition Commission, the report shall, if the member so wishes, include a statement of his disagreement and of his reasons for disagreeing.";
	(b) for subsection (2) there is substituted—
	"(2) For the purposes of the law relating to defamation, absolute privilege attaches to any report made by the Competition Commission on a reference under section 12.
	(2A) In making any report on a reference under section 12 the Competition Commission must have regard to the following considerations before disclosing any information.
	(2B) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(2C) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(2D) The third consideration is the extent to which the disclosure of the information mentioned in subsection (2C)(a) or (b) is necessary for the purposes of the report."
	(1D) For section 18 (provisions supplementary to exercise by Commission of functions under sections 15 and 16) there is substituted—
	"18 SECTIONS 15 AND 16: GENERAL
	(1) For the purposes of the law relating to defamation, absolute privilege attaches to any notice under section 15(4) or 16(4) or (6).
	(2) In publishing or serving any notice under section 15(4) or 16(4) or (6), the Competition Commission must have regard to the following considerations before disclosing any information.
	(3) The first consideration is the need to exclude from disclosure (so far as practicable) any information whose disclosure the Competition Commission thinks is contrary to the public interest.
	(4) The second consideration is the need to exclude from disclosure (so far as practicable)—
	(a) commercial information whose disclosure the Competition Commission thinks might significantly harm the legitimate business interests of the undertaking to which it relates, or
	(b) information relating to the private affairs of an individual whose disclosure the Competition Commission thinks might significantly harm the individual's interests.
	(5) The third consideration is the extent to which the disclosure of the information mentioned in subsection (4)(a) or (b) is necessary for the purposes of the notice.
	(6) The following sections of Part 3 of the Enterprise Act 2002 shall apply, with the modifications mentioned in subsections (7) and (8), for the purposes of any investigation by the Competition Commission for the purposes of the exercise of its functions under section 15 or 16, as they apply for the purposes of any investigation on references under that Part—
	(a) section 106 (attendance of witnesses and production of documents etc.);
	(b) section 107 (enforcement of powers under section 106: general);
	(c) section 108 (penalties);
	(d) section 109 (penalties: main procedural requirements);
	(e) section 110 (payments and interest by instalments);
	(f) section 111 (appeals in relation to penalties);
	(g) section 112 (recovery of penalties); and
	(h) section 113 (statement of policy).
	(7) Section 107 shall, in its application by virtue of subsection (6), have effect as if—
	(a) subsection (2) were omitted;
	(b) in subsection (4), for the words "the publication of the report of the Commission on the reference concerned" there were substituted "the publication by the Commission of a notice under section 16(6) of the Transport Act 2000 in connection with the reference concerned or, if no direction has been given by the Commission under section 15(2) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which it was possible to give such a direction within the permitted period"; and
	(c) in subsection (9) the words from "or section" to "section 64(3))" were omitted.
	(8) Section 108(5)(b) shall, in its application by virtue of subsection (6), have effect as if for sub-paragraph (ii) there were substituted—
	"(ii) if earlier, the day on which a notice is published by the Commission under section 16(6) of the Transport Act 2000 in connection with the reference concerned or, if no direction is given by the Commission under section 15(2) of that Act in connection with the reference concerned and within the period permitted for that purpose, the latest day on which such a direction may be given within the permitted period.".
	(9) Section 114 of the Enterprise Act 2002 (false or misleading information) shall apply in relation to functions of the Competition Commission in connection with the exercise of its functions under section 15 or 16 as it applies in relation to its functions under Part 3 of that Act but as if, in subsections (1)(a) and (2), the words "the OFT," and "or the Secretary of State" were omitted.
	(10) Provisions of Part 3 of the Enterprise Act 2002 which have effect for the purposes of sections 106 to 114 of that Act (including, in particular, provisions relating to offences and the making of orders) shall, for the purposes of the application of those sections by virtue of subsection (6) or (9), have effect in relation to those sections as applied by virtue of those subsections.
	(11) Accordingly, corresponding provisions of this Act shall not have effect in relation to those sections as applied by virtue of those subsections.""

Lord McIntosh of Haringey: My Lords, I have spoken at various times, which I could list, to Amendments Nos. 291 to 345. I commend the amendments to the House. I beg to move Amendments Nos. 291 to 325 en bloc.

On Question, amendments agreed to.
	Schedule 26 [Repeals and revocations]:

Lord McIntosh of Haringey: moved Amendments Nos. 326 to 343:
	Page 380, line 9, at end insert—
	
		
			  "Section 161(2)." 
		
	
	Page 380, line 22, at end insert—
	
		
			  "Section 26(2)." 
		
	
	Page 381, line 9, in column 2 at beginning insert—
	
		
			  "In section 44, subsections (3) and (3A)." 
		
	
	Page 381, line 11, in column 2 at beginning insert—
	
		
			  "In section 24, subsections (7) and (7A). 
			  In section 26A, subsections (12) and (13)." 
		
	
	Page 381, line 12, at end insert—
	
		
			  "In section 41E, subsections (7) and (8)." 
		
	
	Page 382, line 33, in column 2 at beginning insert—
	
		
			  "In section 12, subsections (8) and (8A). 
			  In section 14A, subsections (12) and (13)." 
		
	
	Page 382, line 37, at end insert—
	
		
			  "In section 56C, subsections (7) and (8)." 
		
	
	Page 382, line 42, leave out "paragraph" and insert "paragraphs 4(5) and" Page 382, line 45, in column 2 at beginning insert—
	
		
			  "Section 46(3)." 
		
	
	Page 382, line 47, at end insert—
	
		
			  "Section 192." 
		
	
	Page 383, line 15, in column 2 at beginning insert—
	
		
			  "In section 14, subsections (7) and (7A)." 
		
	
	Page 383, line 28, in column 2 at beginning insert—
	
		
			  "Article 15(8) and (8A)." 
		
	
	Page 383, line 36, at end insert—
	
		
			  "Section 13(8) and (8A)." 
		
	
	Page 384, line 10, in column 2 at beginning insert—
	
		
			  "Article 35(3) and (3A)." 
		
	
	Page 384, line 22, in column 2 at beginning insert—
	
		
			  "Article 15(9) and (9A)." 
		
	
	Page 385, line 50, at end insert—
	
		
			  "In Schedule 14, paragraph 3." 
		
	
	Page 386, line 11, leave out column 2 and insert—
	
		
			  "Section 20." 
		
	
	Page 386, line 14, in column 2 at beginning insert—
	
		
			  "Section 12(9), (10) and (11)." 
		
	
	On Question, amendments agreed to.
	Clause 275 [Extent]:

Lord McIntosh of Haringey: moved Amendments Nos. 344 and 345:
	Page 194, line 6, leave out "248" and insert "251"
	Page 194, line 7, leave out "247" and insert "250"
	On Question, amendments agreed to.
	House adjourned at eighteen minutes past nine o'clock.